Finance Minister Muhammad Aurangzeb has raised concerns over the growing scale of unregulated digital transactions in Pakistan, warning that the country risks slipping back into the grey list of the Financial Action Task Force (FATF) if effective regulatory measures are not implemented soon. Speaking at the Leadership Summit on Blockchain and Digital Assets: Technology and Innovation, the minister cautioned that the lack of oversight in digital dealings poses a serious threat to financial stability and international credibility.
Aurangzeb highlighted that nearly 10 to 15 percent of Pakistan’s population, equating to more than 25 million people, particularly young individuals, are actively engaged in digital businesses and transactions. He stressed that this level of activity cannot be ignored and that the state must respond with clear regulations to mitigate risks of money laundering, terrorist financing, and other unlawful financial flows.
Referring to Pakistan’s difficult experience in exiting the FATF grey list after six years, the minister said the country cannot afford to jeopardize its progress by failing to regulate digital transactions. “If certain level of activity is happening and happening at this scale, it’s only a question of when, not if, that we are going to get into trouble as a country, as a sovereign again,” he said.
His remarks come just two days ahead of the maiden meeting of the Pakistan Virtual Assets Regulatory Authority (PVARA), scheduled for Monday. The forum will review policy matters and discuss the design of a comprehensive regulatory framework for digital assets and virtual transactions. This authority is expected to play a pivotal role in shaping the future of digital finance in Pakistan, particularly in areas like cryptocurrency and blockchain-based innovations.
Currently, digital transactions through cryptocurrencies remain illegal in Pakistan. Amendments related to the legalization of digital currencies are still awaiting approval from the federal cabinet. Prime Minister Shehbaz Sharif has constituted a special committee to review these amendments, including proposals on whether dual nationals should be allowed to serve as deputy governors of the State Bank of Pakistan.
Aurangzeb emphasized that while Pakistan needs a regulatory safety net to guard against international sanctions, it must also accelerate its adoption of emerging technologies such as blockchain, artificial intelligence (AI), cryptocurrency, and Web 3.0. These, he argued, are essential tools for building a resilient and forward-looking digital economy.
He further noted that other nations have already made significant progress in adopting these technologies, while Pakistan continues to lag behind. However, he added that the country has the advantage of drawing upon international collaborations and proven success models, which can be adapted to local needs. “We don’t need to start from ground zero. We can use existing templates and assess whether they work for Pakistan or not,” the finance minister said.
The minister reiterated his ministry’s commitment to supporting the development of the digital economy. He stressed that Pakistan must seize the opportunity to leverage innovation while ensuring financial discipline and compliance with global standards. “We have to accelerate our journey in terms of the new economy, and the ministry stands ready to assist,” he concluded.
