Pakistan is at the forefront of a digital finance transformation, with experts estimating that local investments in cryptocurrency could soar as high as $30 billion. Despite this potential, the lack of robust regulatory frameworks and pressing cybersecurity threats loom large. With the establishment of the Pakistan Virtual Assets Regulatory Authority (PVARA) and ongoing discussions about a Central Bank Digital Currency (CBDC), the nation is on the brink of a financial breakthrough—but delays could cost the economy billions in missed opportunities.
The Economic Landscape of Crypto in Pakistan
In recent years, Pakistan has discovered an untapped vault of digital investment potential, estimated between $20 billion and $30 billion. With trading possibilities reaching up to $300 billion—nearly equal to the country’s GDP—experts argue that a well-regulated approach to cryptocurrency could revolutionize the economy. Zafar Masud, President of the Pakistan Banks Association, stresses the urgency of seizing these opportunities, stating, “Shape the rules before they shape you,” before warning that regulatory delays might lead to a staggering $25 billion loss in potential economic growth.
Moreover, the ambiguity surrounding the legal status of cryptocurrencies has made it challenging for investors to commit fully. As Pakistanis engage in cryptocurrency trading, the absence of regulations means that the actual scale of these investments remains largely unverified, raising significant concerns about potential financial stability and investor protection.
Call for Regulatory Reforms
The regulatory environment in Pakistan is in dire need of clarity. Although efforts have been made, particularly following a recent directive from the Peshawar High Court calling for the government to finalize cryptocurrency legislation within two months, the current landscape is still highly fragmented. As of now, the PVARA, established in 2025, is tasked with supervising virtual assets, yet it operates under an ordinance with a limited shelf life of 120 days.
Faisal Mazhar from the State Bank has confirmed that the process of developing a digital currency has been in the works since 2022, describing this evolution as “an evolutionary process.” The urgency for a formalized framework cannot be overstated, as the PVARA represents just the initial steps towards stabilizing a sector that is critical for the nation’s economic future.
The Future of Digital Currency Initiatives
Many financial experts suggest a phased approach to the integration of digital currencies, starting with the implementation of a Central Bank Digital Currency (CBDC). This initiative could significantly lower remittance costs and promote financial inclusion across the country. Zafar Masud is optimistic about the prospects of a rupee stablecoin, stating that Pakistan is “seriously considering” its introduction, while Yara Wu emphasizes that a CBDC could offer a secure and efficient alternative for cross-border transfers.
Additionally, Pakistan’s Raast instant payment system has already demonstrated significant promise since its launch in 2021, facilitating transactions worth approximately Rs. 4.79 trillion. This innovative system illustrates the government’s commitment to nurturing digital finance infrastructure, paving the way for broader acceptance and use of cryptocurrencies.
Cybersecurity and Challenges Ahead
Despite the promising outlook, major hurdles remain, primarily in the realm of cybersecurity. Zafar Masud has vocally highlighted the concerns regarding “regulatory ambiguity and negative public perception,” underscoring the vital need for systematic safeguards. Sajid Amin from the Sustainable Development Policy Institute echoed these sentiments, mentioning the need for robust protections against scams and fraud, which can erode trust in the burgeoning crypto market.
Furthermore, economic analysts have criticized some proposed government policies, such as providing subsidized electricity for Bitcoin mining, labeling them as “puzzling and opaque.” This approach could place public resources at risk and aligns poorly with the need for cautious and strategic resource management as the world navigates the speculative nature of cryptocurrencies.
Leadership and Strategic Vision for the Crypto Ecosystem
At the helm of these developments is Bilal Bin Saqib, CEO of the Pakistan Crypto Council and a strong advocate for blockchain policy. His collaboration with Changpeng Zhao (CZ) from Binance is expected to propel Pakistan’s crypto ambitions forward, facilitating technological innovation and establishing a coherent digital asset regulatory framework. This partnership signifies a potential “digital explosion” for the Pakistani crypto scene, aligning the nation with global fintech advancements.
Yet, amidst these exciting advancements, clarity remains indispensable. Official announcements regarding a state-backed Bitcoin Reserve sparked controversy only to be followed by strong denials, highlighting the still-uncertain policy landscape. Experts warn that without decisive regulatory frameworks, Pakistan risks losing its chance to emerge as a competitive player in the international crypto arena.
Charting a Course in the Digital Future
As Pakistan navigates this digital financial landscape, the intersection of regulation, opportunity, and security will be crucial. Experts remain optimistic that comprehensive policies and regulations will materially transform the financial system, boost economic growth, and attract significant foreign investment. However, swift and decisive action will be essential to harness these opportunities and mitigate risks. The clock is ticking, and Pakistan must act now to secure its place in the global crypto revolution.
