Pakistan Proposes Digital Asset Framework to Balance Innovation and Security

Pakistan has proposed a regulatory framework for digital assets that prioritizes compliance with international standards, particularly those set by the Financial Action Task Force (FATF). This framework is designed to address concerns related to terrorism financing, money laundering, and Know Your Customer (KYC) controls. The Federal Investigation Agency (FIA) introduced the proposal, with Director Sumera Azam highlighting the significance of this shift. Azam stated that the policy aims to balance technological advancement with national security imperatives, marking a historic change in Pakistan's approach to digital finance.

The proposed framework is subject to legislative approval and will involve input from digital asset firms operating within the country. The rollout is expected to begin in 2026 and will be implemented in multiple phases. This move comes after years of an anti-crypto stance by the Pakistani government, which reached its peak in 2023 when officials called for a nationwide ban on digital assets. The regulatory pivot towards embracing cryptocurrencies reflects a significant change in the government's approach to digital finance.

In May 2023, the former minister of state for finance and revenue, Aisha Ghaus Pasha, had stated that Pakistan would never legalize cryptocurrencies due to the potential for digital assets to circumvent FATF regulations. However, less than two years later, in February 2025, the Finance Ministry of Pakistan signaled a major regulatory shift by forming the Pakistan Crypto Council. This council aims to establish clear crypto regulations and attract foreign investment. Bilal bin Saqib, the CEO of the Pakistan Crypto Council, emphasized the potential of Pakistan as a low-cost, high-growth market with a young population and a workforce ready to build in the web3 space.

The Pakistan Crypto Council is exploring the use of excess energy for Bitcoin mining as part of a broader effort to turn Pakistan into an international hub for crypto mining. On April 7, the Council appointed Binance co-founder Changpeng Zhao as a crypto adviser to guide the organization's policy efforts. This appointment underscores the government's commitment to leveraging international expertise to develop a robust regulatory framework for digital assets.

The proposed framework is part of a broader effort by the Pakistani government to regulate the use of surplus electricity for Bitcoin mining and other digital assets. This initiative aims to ensure compliance with international standards while safeguarding consumer interests. The government is also working on regulatory frameworks to promote the use of digital assets in a controlled and secure manner. The introduction of this policy framework is a significant development for Pakistan, as it seeks to integrate digital finance into its economic landscape while maintaining strict compliance with international standards. The policy's focus on innovation and controlled experimentation is expected to foster a more dynamic and secure digital finance ecosystem in the country.