STEP by step, Pakistan is, at least on paper, moving closer to recognising, adopting and regulating cryptocurrencies and virtual assets at the official level. The latest development is a cabinet nod to the Pakistan Virtual Assets Regulatory Authority, which is to be tasked with licensing, monitoring, and supervising virtual asset service providers, ensuring alignment with global standards set by the FATF, the IMF and World Bank, according to news reports. The finance ministry has described the cabinet’s approval as “a landmark step towards establishing a comprehensive legal and institutional framework for overseeing the country’s rapidly growing digital assets ecosystem”, though precisely what this “comprehensive legal and institutional framework” entails is not known. PVARA will “also oversee public protection mechanisms, anti-money laundering protocols, and cyber risk mitigation across all virtual asset transactions within the country”, the ministry says. Those are a lot of important-sounding buzzwords: what crypto investors will be more interested in is precisely how government policy will affect them. In that respect, the government still has much explaining to do.

Several concerns have already been raised regarding the true motivation behind Pakistan’s recent openness towards cryptocurrencies and virtual assets. It may be recalled that the Pakistan Crypto Council, announced earlier this year as the primary oversight body for crypto technologies in the country, was created soon after a visit from a high-profile delegation of American businesspersons representing crypto interests connected to the Donald Trump presidency. Cryptocurrencies also appear to have been a significant topic of discussion when Mr Trump recently met Pakistan’s army chief in Washington. Notable media outlets, including Bloomberg and The NYT, have recently examined the US president and his family’s interests in crypto and raised pertinent questions about the ethics of their dealings and potential conflicts of interest. Perhaps Pakistan should be more wary about the personal interest being shown by the Trumps in its journey. True, cryptocurrencies and digital assets are a promising new technology, but they also carry risks. If Pakistan is serious about crypto adoption and developing an industry, it should prioritise its own interests while devising policies and regulations to minimise risk and harm. It must also remain vigilant against foreign pressure. This is uncharted territory that regulators must tread carefully.

Published in Dawn, July 9th, 2025