Pakistan Aims to Crack the Crypto Code with Strict Licensing Play

Pakistan Invites Global Crypto Firms to Apply for Licenses

Pakistan has announced a new regulatory initiative to attract global cryptocurrency firms to the country by inviting applications for operating licenses. This move is part of a broader strategy to position Pakistan as a hub for blockchain innovation and digital finance in South Asia. The government, under Prime Minister Shehbaz Sharif, has emphasized the importance of regulating the cryptocurrency sector to ensure stability, transparency, and compliance with international standards. The application process will be managed by the State Bank of Pakistan (SBP), the country’s central bank, which will evaluate candidates based on their technical capabilities, financial strength, and adherence to anti-money laundering (AML) and counter-terrorism financing (CTF) protocols. The SBP has not yet released the exact number of licenses it intends to issue or the criteria for approval, but it has indicated that the licenses will be limited to a select group of firms that meet strict regulatory requirements.

The decision reflects growing interest in blockchain technology and digital assets across South Asia, as countries like India and Bangladesh explore similar initiatives. Pakistan’s move is also aligned with its broader economic reform agenda, which seeks to attract foreign investment and stimulate innovation in key sectors. The government has previously engaged with international technology and financial institutions to develop a robust legal framework for cryptocurrency and blockchain startups. The SBP has also been working on a potential digital currency of its own, which is expected to complement the licensing initiative and provide a secure platform for digital transactions.

Analysts suggest that Pakistan’s regulatory approach could set a precedent for other emerging markets in the region, particularly those seeking to balance innovation with financial stability. While the country has a large and growing tech-savvy population, it has faced challenges related to cybersecurity, financial crime, and digital infrastructure. The new licensing regime is intended to address these concerns by imposing strict operational and compliance requirements on licensed firms. The SBP has also signaled its intent to collaborate with global regulators to ensure that Pakistan’s crypto sector remains aligned with international best practices.

The invitation to global firms highlights Pakistan’s strategic ambitions in the digital economy. The government has expressed interest in leveraging blockchain technology for public services, including land registry, supply chain management, and cross-border payments. In recent years, Pakistan has also expanded its digital payments infrastructure, with the SBP introducing a national payment system and encouraging mobile banking to improve financial inclusion. The new crypto licensing initiative is expected to build on these efforts and provide a legal foundation for the development of a vibrant blockchain ecosystem.

While the initiative is still in its early stages, it has generated significant interest among international investors and technology firms. The SBP has not yet disclosed the timeline for issuing licenses or the fees associated with the process, but it has emphasized that the regulatory framework will be transparent and consistent with global standards. The government has also indicated that it will provide support for licensed firms through tax incentives, infrastructure development, and access to talent in the tech sector.

The move to regulate and license crypto firms is seen as a key step in Pakistan’s digital transformation strategy. By creating a formal regulatory environment, the government aims to attract foreign capital, foster innovation, and position the country as a regional leader in blockchain and digital finance. The success of the initiative will depend on the SBP’s ability to enforce compliance, address security risks, and maintain a balance between regulatory oversight and market flexibility.