Summary

Regulators in Pakistan have proposed a compliance-focused regulatory framework for digital assets, aligned with rules set by the Financial Action Task Force (FATF). This move is part of a significant shift in the country’s stance on cryptocurrencies, which were previously met with strong opposition. The framework, introduced by the Federal Investigation Agency (FIA), targets terrorism financing, money laundering, and Know Your Customer controls enforced by FATF.

Regulatory Framework

The proposed regulatory framework for digital assets is centered around addressing the key concerns of terrorism financing and money laundering provisions. This marks a significant shift in Pakistan’s stance on cryptocurrencies, which was previously anti-crypto. The FIA Director, Sumera Azam, stated that this policy proposal seeks to strike a balance between technology progress and national security imperatives.

"This is a paradigm shift in how Pakistan views digital finance. The policy proposal seeks to strike a historic balance between technological advancement and national security imperatives.”

The framework is subject to legislative approval and will involve input from digital asset firms operating within the country. A multi-phased rollout of the new regulations is expected, commencing in 2026.

Background

Regulators in Pakistan have only recently shown a willingness to adopt progressive policies regarding cryptocurrencies. Prior to this shift, there was significant opposition, culminating in calls for a blanket ban on digital assets in 2023. Notably, former State Minister of Finance and Revenue Aisha Ghaus Pasha was strongly against the legalization of cryptocurrencies due to concerns about potential circumvention of FATF regulations.

However, just under two years later, the Finance Ministry signalled a change in course by establishing the Pakistan Crypto Council in February 2025. This move aimed at laying out clear crypto regulations and attracting foreign investment by opening up Pakistan as an international hub for digital assets.

Pakistan’s Crypto Council

The formation of the Pakistan Crypto Council has been seen as a significant step forward. The CEO of the council, Bilal bin Saqib, expressed optimism about the market potential of Web3 technologies in Pakistan:

"Pakistan is a low-cost, high-growth market, with 60% of the population under 30. We have a web3 native workforce ready to build,” he noted.

Further indications of the country’s crypto ambitions came to light when it emerged that the Council was considering using excess energy for Bitcoin mining as part of broader efforts to develop Pakistan as a hub for cryptocurrency mining operations.

More recently, on April 7th, Changpeng Zhao, the co-founder of Binance, was appointed as a financial advisory board member by the council to support policy efforts. This appointment reflects the growing acceptance and encouragement that regulators are showing towards cryptocurrencies in Pakistan.

Conclusion

In summary, regulators in Pakistan have proposed a regulatory framework for digital assets with a strong emphasis on compliance with FATF regulations. This marks a significant shift from previous anti-crypto stance and highlights the country’s move to establish clear crypto regulations in order to engage and attract foreign investment. The steps taken by the newly established Pakistan Crypto Council indicate an openness to the development of technology-related sectors, including cryptocurrency mining and regulatory bodies aiming at establishing the nation as "an international hub for crypto mining.