Is Crypto Legal in Pakistan? Complete Guide to Digital Asset Laws and Regulations in 2025

Pakistan's cryptocurrency situation has undergone dramatic transformations throughout 2025, creating both opportunities and confusion for digital asset enthusiasts. The question of whether crypto is legal in Pakistan now requires understanding a complex regulatory environment where official bans coexist with progressive policy initiatives. 

Recent developments include the establishment of the Pakistan Digital Assets Authority and conflicting statements from regulatory bodies, making Pakistan's crypto status one of the most intriguing cases in global digital finance.

The Current Legal Status: A Tale of Two Policies

Despite recent official moves to promote cryptocurrency, both the State Bank of Pakistan (SBP) and the Ministry of Finance (MoF) have reiterated that cryptocurrencies remain illegal in Pakistan under current regulations. 

This official stance was clarified during a National Assembly Standing Committee session in May 2025, even as the government simultaneously launched progressive crypto initiatives.

The State Bank of Pakistan maintains its position from 2018, when it first issued circulars prohibiting banks and financial institutions from facilitating cryptocurrency transactions. 

The SBP has declared cryptocurrencies illegal and issued public notices banning all related transactions. This creates a peculiar situation where the central bank's enforcement arm continues referring crypto-related cases to law enforcement agencies.

However, On May 30, in what domestic media described as "another U-turn" on crypto, the State Bank of Pakistan (SBP) said virtual assets were legal. This statement contradicted previous positions and highlighted the ongoing policy confusion affecting both investors and businesses operating in Pakistan's digital asset space.

The contradiction between official prohibition and regulatory development efforts reflects Pakistan's struggle to balance traditional financial oversight with the growing demand for digital asset innovation in a country where informal crypto trading reportedly reaches $25 billion annually.

Read Also: Pakistan Sets National Crypto Strategy: From Regulation to Adoption

Pakistan Digital Assets Authority: The Game Changer

The Pakistan Digital Assets Authority (PDAA) will serve as a regulatory body to oversee licensing, regulate exchanges, custodians, wallets, tokenized platforms, stablecoins and decentralized finance applications. 

This groundbreaking institution represents Pakistan's most significant step toward cryptocurrency legitimization since the sector emerged.

The PDAA's establishment in May 2025 evolved from the Pakistan Crypto Council, which was launched in March 2025. In February 2025, the Pakistani government established a Crypto Council. 

In May, that council was elevated into a full-fledged regulatory body named the Pakistan Digital Asset Authority. This rapid progression demonstrates the government's commitment to creating a comprehensive regulatory framework.

Finance Minister Muhammad Aurangzeb emphasized that the PDAA framework aims to protect consumers while attracting global investment and positioning Pakistan competitively in the digital economy. The authority's mandate includes issuing licenses, establishing compliance standards, and ensuring that digital asset activities align with international standards, particularly those set by the Financial Action Task Force.

The creation of PDAA signals Pakistan's recognition that digital assets cannot be ignored or simply banned away. Instead, the country appears to be following a controlled approach that seeks to harness blockchain technology's benefits while maintaining regulatory oversight and preventing illicit activities.

Read Also: Pakistan Bitcoin Reserve and Mining Plan

Regulatory Bodies and Their Conflicting Roles

Pakistan's crypto regulatory landscape involves multiple institutions with sometimes overlapping and conflicting mandates. The State Bank of Pakistan remains the primary opponent of cryptocurrency activities, consistently maintaining its ban on virtual currency transactions since 2018. 

The SBP's Financial Monitoring Unit actively investigates crypto-related activities and refers cases to law enforcement agencies.

The Securities and Exchange Commission of Pakistan has shown more openness to digital asset regulation. In 2020, Pakistan's Securities and Exchange Commission (SECP) released a paper outlining potential approaches for regulating cryptocurrency in their country. 

The SECP explored various regulatory frameworks, including registration requirements for Initial Exchange Operators and provisions for secondary trading through multiple channels.

The Ministry of Finance now chairs the evolving crypto policy through its oversight of the Pakistan Crypto Council and PDAA. 

This ministerial involvement represents the highest level of government engagement with cryptocurrency regulation, suggesting that digital asset policy has become a cabinet-level priority rather than merely a technical banking issue.

The Financial Monitoring Unit continues its enforcement role, focusing on anti-money laundering and counter-terrorism financing compliance. 

However, its activities may need recalibration as formal regulatory frameworks develop through the PDAA, potentially shifting from enforcement of blanket prohibitions to ensuring compliance with new licensing requirements.

What This Means for Crypto Users and Businesses

The regulatory uncertainty creates significant challenges for individuals and businesses interested in cryptocurrency activities in Pakistan. 

Current enforcement means that traditional crypto trading, mining, and exchange operations remain technically illegal under existing SBP directives, exposing participants to potential legal consequences including fines, asset confiscation, and criminal prosecution.

However, the PDAA's establishment suggests that properly licensed and regulated crypto activities may soon become legal. 

The authority will also aim to help startups and youth develop blockchain-based solutions. This indicates that Pakistan recognizes cryptocurrency technology's potential for economic development and youth employment.

For businesses, the transition period requires careful navigation. Companies should monitor PDAA licensing requirements and prepare compliance frameworks that meet both traditional financial regulations and emerging digital asset standards. 

Early engagement with regulatory development could provide competitive advantages once the formal framework becomes operational.

International businesses considering Pakistan operations should note that the country's large informal crypto market represents both opportunity and risk. 

While regulatory clarity may unlock legitimate business prospects, current legal ambiguity requires comprehensive risk assessment and potentially delayed market entry until regulatory frameworks stabilize.

Conclusion

Pakistan's cryptocurrency legality remains in flux, with official bans coexisting alongside progressive regulatory development through the Pakistan Digital Assets Authority. While the State Bank of Pakistan maintains its prohibition on crypto activities, the government's establishment of dedicated regulatory infrastructure suggests that legal cryptocurrency operations may emerge in the near future.

The key development is Pakistan's apparent shift from outright rejection to controlled acceptance of digital assets. The PDAA represents recognition that cryptocurrency technology offers economic benefits that warrant regulatory accommodation rather than blanket prohibition. 

However, until formal licensing frameworks become operational and conflicts between regulatory bodies resolve, cryptocurrency activities in Pakistan remain legally risky.

Stakeholders should closely monitor PDAA's regulatory development while respecting current SBP restrictions. 

Pakistan's large informal crypto market and government interest in blockchain innovation suggest that proper regulatory frameworks could transform the country into a significant digital asset hub, but patience and careful compliance will be essential during this transition period.

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FAQ

Is cryptocurrency completely illegal in Pakistan right now? 

Currently, yes. The State Bank of Pakistan and Ministry of Finance maintain that cryptocurrencies remain illegal under existing regulations, despite the government's simultaneous creation of the Pakistan Digital Assets Authority to develop regulatory frameworks.

When will crypto become legal in Pakistan? 

There's no official timeline, but the Pakistan Digital Assets Authority's establishment in May 2025 suggests regulatory frameworks are actively being developed. Full legalization will likely require parliamentary approval and comprehensive compliance structures.

Can I face penalties for using cryptocurrency in Pakistan? 

Yes. Since specific crypto laws don't exist, enforcement occurs under existing financial regulations like the Foreign Exchange Regulation Act. Penalties can include significant fines, imprisonment, and asset confiscation by law enforcement agencies.

What is the Pakistan Digital Assets Authority's role? 

The PDAA will oversee licensing and regulation of crypto exchanges, custodians, wallets, tokenized platforms, stablecoins, and DeFi applications. It aims to create a compliant framework that protects consumers while enabling blockchain innovation.

Is cryptocurrency mining legal in Pakistan? 

No specific laws explicitly prohibit mining, but it's considered illegal under the State Bank of Pakistan's blanket ban on all crypto-related activities. Mining operations face the same legal risks as trading or transacting with digital currencies.