Pakistan’s rapidly expanding crypto landscape is drawing renewed scrutiny as fresh data suggests that enormous sums may be moving across borders without oversight. According to the Chainalysis 2025 Global Adoption Index, Pakistan now ranks third worldwide in overall crypto adoption, a position driven primarily by small-scale investors who have embraced digital assets at an extraordinary rate. A prior report from 2020-21 by the Federation of Pakistan Chambers of Commerce and Industry estimated that Pakistanis collectively held around 20 billion dollars in cryptocurrencies, underscoring how deeply digital assets have embedded themselves within the country’s informal financial ecosystem.
While major global exchanges like Binance remain widely used, research indicates that a significant portion of crypto trading in Pakistan takes place on local peer to peer platforms. These platforms, which allow users to transact directly with one another, typically lack Know Your Customer procedures. This absence of verification enables substantial financial activity to occur without regulatory visibility, making it possible for large sums to move across borders undetected. Such conditions pose a serious challenge at a time when international watchdogs are increasingly focused on the risks tied to virtual assets.
The chairman of the Exchange Companies Association of Pakistan recently sounded an alarm by claiming that individuals have been purchasing dollars from foreign exchange companies and then using those dollars to invest in crypto. According to his assessment, roughly 600 million dollars may have effectively vanished from the formal financial system through this practice. If these concerns are validated, Pakistan could again face scrutiny from the Financial Action Task Force. Crypto assets, when unregulated, can serve as conduits for money laundering and terror financing, issues that remain central to FATF evaluations. The organisation requires countries to impose strict controls over virtual assets, including the collection and sharing of sender and receiver information and ensuring that service providers maintain proper licensing and are subject to effective supervision.
Pakistan, however, is still in the early stages of constructing a comprehensive framework to govern digital assets. The Pakistan Crypto Council, established earlier this year, has yet to develop or announce detailed guidelines for stakeholders. Meanwhile, the Pakistan Virtual Asset Regulatory Authority has initiated the licensing process for virtual asset service providers but has only progressed to the stage of seeking expressions of interest from international exchanges. This slow regulatory rollout contrasts sharply with the scale of grassroots crypto activity across the country.
With unlicensed trading platforms operating freely and facilitating the movement of money with little transparency, the risks of illicit financial flows remain significant. The warnings issued by the Ecap chairman should serve as a prompt for regulators to accelerate their efforts. Without swift and robust regulatory measures, Pakistan risks drawing heightened attention from global oversight bodies once again, potentially placing its financial system under renewed international pressure.
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