is cryptocurrency allowed in pakistan

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Is Cryptocurrency Allowed in Pakistan?

Cryptocurrency has become a hot topic globally: some countries fully legalize it, others regulate it heavily, and some ban it outright. So what is the situation in Pakistan?

Key Definitions

Before we dig in, a few definitions help:

Cryptocurrency / Virtual Assets (VAs): Digital assets like Bitcoin, Ethereum, etc., that use cryptography and decentralization (often blockchain).
Legal Tender: What a government officially recognizes as a means to pay debts and for services. If something is not “legal tender,” that means you cannot demand it be accepted as payment in places that don’t voluntarily accept it.
Regulation / Licensing: These are laws and government rules to control the usage, trade, issuance, taxation etc. of crypto.
Advisory / Circular: A “notice” or “warning” by a government agency informing banks, financial institutions, or the public what they can’t or shouldn’t do.

Current Legal Status of Cryptocurrency in Pakistan

State Bank of Pakistan (SBP) & Regulations

The State Bank of Pakistan (SBP) in 2018 issued Circulars / Notifications (for example, BPRD Circular No. 03 of 2018) which state that virtual currencies (VCs) like Bitcoin, Litecoin, etc., are not legal tender, nor issued or guaranteed by the government. They also stated that SBP has not authorized or licensed any individual/entity for issuance, sale, purchase, exchange, investment in such virtual currencies / tokens in Pakistan. State Bank of Pakistan+2Dawn+2
The circular also instructs banks, DFIs (Development Financial Institutions), microfinance banks, payment service providers, etc., to refrain from dealing in virtual currencies, promoting them, holding them, or facilitating customer transactions involving them. State Bank of Pakistan+2Dawn+2

Is Crypto Completely Banned?

There is some ambiguity. Official statements as of 2025 reaffirm that cryptocurrency is not legal in Pakistan; trading is not permitted, according to SBP and the Ministry of Finance. Dawn+3Business Recorder+3Dawn+3
But SBP has also clarified in more recent times that it has never declared that all activity with crypto is criminal, and that some restrictions are precautionary, due to lack of regulation. pakeconet.com.pk+2SAMAA TV+2
Important: While virtual currencies are not recognized as legal tender, owning crypto or using it in peer-to-peer fashion is not explicitly criminalized under current law. That said, many financial institutions are forbidden to process crypto-related transactions. new.24justice.pk+2Pakistan Today+2

Courts & Legislative Pressure

The Peshawar High Court in 2025 gave the Federal Government two months to legislate on cryptocurrency and other digital currency trading. Dawn+1
There have been petitions (e.g. by public figures like Waqar Zaka) challenging bans, or seeking clarity / lifting of restrictions. Some argue SBP’s circulars go beyond given legal authority. new.24justice.pk+1

Recent Developments & Regulation in the Works

There are a number of evolving developments that signal possible change in how crypto is treated in Pakistan:

Pakistan Crypto Council (PCC)
The government has formed a Crypto Council, headed by the Finance Minister, to explore digital asset policy. Dawn+2Pakistan Today+2
Virtual Assets Regulatory Authority (or similar body) proposal / draft law
There is a draft of a regulatory framework or bill (Virtual Assets Act 2025) which aims to establish a regulator / oversight mechanism for virtual assets. ProPakistani+2Geo+2
Review of existing SBP circulars / bans
The new regulatory authority (PVARA or similar) is considering withdrawing some of the earlier bans or advisory circulars (like SBP’s 2018 circular) while keeping controls in place. Business Recorder+1
Pilot for Central Bank Digital Currency (CBDC)
Pakistan’s central bank has announced intention of launching a pilot for a digital version of the Pakistani rupee. This is different from decentralized crypto, but shows interest in digital currency infrastructure. Reuters
Bitcoin mining & Surplus Power
There are initiatives to use surplus electricity to support bitcoin mining and AI data centres. This reflects moving from blanket caution / ban to selective, regulated engagement. Reuters+1

What Is and Isn’t Allowed (As of Mid-2025)

To summarize what actions are or are not permitted in Pakistan:

Activity	Is It Allowed / Legal?	Status / Risks
Owning crypto (private wallet, holding)	Not explicitly illegal; it’s a grey area	No law says you’ll go to jail just for holding crypto, but there are risks if linked to trading or financial institution use.
Trading crypto via exchanges / peer-to-peer	Not officially recognized; restricted for banks & financial institutions; individual trading is risky	Banks and PSOs are forbidden from facilitating such trades; P2P still happens, but users risk account freezing or legal scrutiny. Pakistan Today+3Dawn+3Dawn+3
Using crypto to pay for goods & services	Generally not allowed, since crypto is not legal tender; payments in crypto are not officially recognized.	Businesses accepting crypto might be operating outside regulations.
Mining	Complicated: technically not legalized, but some discussions / plans for mining using surplus power.	Mining depends on regulation; also involves electricity policy and local rules. Reuters+1
Financial institution involvement	Not allowed / forbidden until regulatory framework is in place	Banks, DFIs, payment service providers are explicitly instructed not to process or facilitate crypto transactions. State Bank of Pakistan+1

Risks & Concerns

Why is Pakistan cautious about crypto? There are multiple concerns, often reflected in SBP and government statements:

Money Laundering & Illicit Finance
Crypto offers anonymity / semi-anonymity, cross-border transactions, which could facilitate money laundering, terror financing, etc. Dawn+2Dawn+2
Consumer Protection & Volatility
Price swings, risk of losing private keys, hacking, fraud. Users may have no recourse under current law. Dawn+1
Regulatory & Legal Uncertainty
Since no law yet clearly governs crypto, people involved in trade or investment may face legal grey-zones, risk of action by law enforcement or freezing of bank accounts. new.24justice.pk+2Pakistan Today+2
Foreign Exchange / FX Stability
Large outflows, unregulated transactions could affect currency stability, capital flight, etc. Pakistan Today+1
Infrastructure & Taxation
How to tax gains, how exchanges should get licensed, oversight of wallets, consumer protection, cybersecurity. Without regulation all that is murky.

Arguments in Favour & Opportunities

Even though there are risks, there are arguments for allowing and regulating crypto:

Innovation and Technology Development
Blockchain / crypto is part of fintech innovation. Regulated properly, this can allow Pakistan to attract investment, innovate in finance, tech, data centres etc.
Utilizing Surplus Power & Mining Potential
Pakistan has surplus electricity (in some regions / times), which could be used for mining operations (if regulated), potentially bringing economic activity. Reuters
Digital Assets Can Help Freelancers & Remittances
Many Pakistanis abroad (or freelancers) deal in digital assets; allowing regulated, safer access could help send/receive remittances, access global markets.
CBDC & Digital Payments Future
As more financial systems move digital, having a proper framework for virtual assets helps align with global trends.

What to Expect: Likely Regulatory Path

From recent developments, here’s what seems likely in near-future regarding crypto regulation in Pakistan:

Virtual Assets Law / Act
The “Virtual Assets Bill / Act 2025” seems intended to formalize a regulator (Pakistan Virtual Assets Regulatory Authority or similar) that licensing, oversight, AML/KYC etc. control. ProPakistani+1
Withdrawal or Modification of SBP Circulars
The 2018 circular banning financial institutions from dealing in VCs may be modified or partially withdrawn once the regulatory authority and law are in place. Business Recorder
Safeguards and Controls
Stricter AML (anti money laundering) / combating financing of terrorism (CFT) rules; licensing for exchanges; oversight of wallets; limits on what consumers can do.
Limited Use & Controlled Environment
Probably virtual assets will be allowed under regulatory supervision; not all cryptos may be allowed; payments for goods & services may not be broadly allowed initially; interoperable usage might be restricted.
Increased Enforcement against Illegal Use
Use of crypto for scams, fraudulent schemes is already a concern. As regulation comes, enforcement will likely increase for unlicensed or illicit usage.

Practical Advice if You Use or Want to Use Crypto in Pakistan (2025)

If you are in Pakistan and want to deal with cryptocurrency (invest, trade, mine), here are things to keep in mind:

Use only reliable exchanges; avoid ones that explicitly violate local regulations.
Be cautious about using bank accounts / financial institutions for transactions that might be flagged. Banks are instructed not to facilitate crypto-related operations. State Bank of Pakistan+1
Keep documentation: of purchases / transfers, identity verification etc. This can help if regulators or law enforcement need to see where funds came from.
Understand tax implications (if any). Even though crypto is not fully recognised, gains from crypto might still be taxed under laws concerning income, capital gains, etc. Consult a professional.
Be careful of scams, phishing, fraud. Because regulation is weak, many people have lost money in such schemes.
Monitor regulatory changes: since things are in flux, new laws or rules may come in at any time (Virtual Assets Act etc.).

SEO-Optimized Overview: “Is Cryptocurrency Allowed in Pakistan?”

To answer succinctly for SEO & clarity:

Short answer: No, as of mid-2025, cryptocurrency is not legal tender in Pakistan, and many aspects of crypto activity are banned or strongly restricted.
Long answer: While crypto is not recognized as legal tender, owning crypto is not explicitly criminalized. Financial institutions are barred from facilitating crypto transactions per SBP’s advisory / circulars. There is movement toward creating a regulatory framework (a law, a regulator), which may open up possibilities under controlled conditions.

Comparison: Pakistan vs Other Countries

Putting Pakistan’s stance in global perspective:

Some countries (e.g. El Salvador) have made Bitcoin legal tender. Others like India, China, US have partial regulation, heavy oversight.
Pakistan is somewhere between: not banning ownership completely, but prohibiting institutional / formal use without regulation.
Key difference: countries with mature frameworks grant licenses, define legal status clearly; Pakistan is still working toward that.

What Would “Allowing Cryptocurrency” Look Like in Pakistan?

If Pakistan fully moves toward allowing crypto under regulation, here are features we might see:

A law that defines virtual assets clearly: what is allowed, what is not; what counts as legal tender vs optional contract.
A regulatory authority to issue licenses to crypto exchanges, wallets, brokers.
AML / KYC / CFT rules: who can open accounts, whether identity verification is required, thresholds for reporting.
Rules for taxation of gains / profits from trading or mining.
Provisions for investor protection: security standards for exchanges, clarity about what happens in case of loss or bankruptcy.
Limits or restrictions on using crypto for payments of goods & services until safeguards are ready.
Possibly a framework for mining and energy usage, especially in relation to electricity consumption.

Conclusion

As of now, cryptocurrency is not fully legal in Pakistan. It is not legal tender, and the SBP has placed advisory circulars forbidding banks, financial institutions etc. from dealing with virtual currencies.
However, possession / private trade is not clearly outlawed, but comes with risks (legal, financial, security).
There is a clear move toward regulation. Draft laws and regulatory bodies are being established. These may change the status quo.
Anyone dealing with cryptocurrency in Pakistan must stay updated with government announcements, follow local laws, and proceed with caution.