Pakistan Develops Regulatory Framework for Crypto Market

The Pakistani authorities began creating a legal framework to regulate the activities of local virtual asset service providers (VASP). The new requirements will be focused on compliance with the standards of the Financial Action Task Force (FATF).

The government of Pakistan introduced a new approach to crypto market regulation. According to a report by The Express Tribune, the Federal Investigation Agency (FIA) drafted a bill to regulate local VASPs.

The project is based on key FATF requirements: anti-money laundering (AML), combating the financing of terrorism (CFT), and implementation of KYC procedures. Before official publication, the draft must receive legislative approval and take into account the views of companies operating in the digital asset space. A full launch of the initiative is scheduled for 2026.

According to Sumera Azam, Director of the FIA, the proposed regulatory approach is a significant step in changing Pakistan’s stance on digital finance. The Ministry of Finance’s new policy aims to balance technological innovation with national security.

Pakistan previously held a strict stance on cryptocurrencies and even proposed a full ban on digital assets in 2023. However, in February 2025, the Ministry of Finance announced major reforms and established the National Crypto Council to develop clear rules for crypto regulation and attract foreign investment. Changpeng Zhao, ex-CEO and Co-Founder of Binance, was appointed as an advisor and will assist in shaping the country’s crypto regulatory policy.

At the end of last year, the Pakistani government proposed legalizing the use of central bank digital currency (CBDC) as a means of payment, and in 2023, the Pakistan Banks’ Association (PBA) launched a blockchain platform to implement KYC procedures and facilitate customer data sharing.