The State Bank of Pakistan (SBP) on Friday clarified that it has not deemed as “illegal” the use of cryptocurrency in Pakistan, and had only cautioned to avoid dealing in them due to a “lack of a legal and regulatory framework” in an advisory issued in 2018.
In a brief press release, the central bank said its advisory had asked banks, development finance institutions, microfinance institutions, electronic money institutions, and other financial service providers to safeguard consumers and the financial system from potential risks associated with unregulated digital assets.
“The advisory was issued solely to protect our regulated entities and their customers, not because Vas [virtual assets] were declared illegal,” it said.
“The SBP and Finance Division are currently engaged with the Pakistan Crypto Council established by the federal government for, among others, developing an appropriate legal and regulatory framework for VAs in Pakistan,” it said. “We understand that the legal and regulatory framework would provide the requisite clarity and legal coverage about the VAs ensuring consumer and investor protection,” it added.
The clarification followed a briefing to the National Assembly’s Standing Committee on Finance during which SBP Executive Director Sohail Jawad had noted the 2018 directive remained in effect and all entities must report crypto-related cases to the Financial Monitoring Unit for further investigation by the FIA.
During the same briefing, Secretary Finance Imdadullah Bosal had said cryptocurrencies are still illegal and banned in Pakistan. He had said that the Pakistan Crypto Council did not grant legal parliamentary backing for cryptocurrency, and was serving as a task force for recommending a legal and procedural framework.
The committee had taken up the issue of cryptocurrency following a series of measures taken by the government indicating its impending adoption as legal tender. Earlier this month, the government announced it was allocating 2,000MW of surplus electricity for Bitcoin mining and artificial intelligence data centers. A few days later, PCC CEO Bilal bin Saqib—who has also been appointed the Special Assistant to the P.M. on Blockchain and Crypto—had announced the government’s intent to establish a Strategic Bitcoin Reserve.