The State Bank of Pakistan (SBP) has clarified that digital assets will fall under the purview of the Foreign Exchange Regulation Act (FERA), meaning the law’s current restrictions, including the maximum annual limit of $100,000 on foreign transfers, will also apply to cryptocurrencies and other virtual assets. The development underscores both regulatory challenges and policy debates as Pakistan edges closer to a formal framework for digital assets.
The announcement was made during a session of the Senate Standing Committee on Finance, chaired by PPP Senator Saleem Mandviwalla, which began clause-by-clause deliberations on the Pakistan Virtual Assets Regulatory Authority (PVARA) Bill. SBP Acting Deputy Governor Dr. Inayat Hussain confirmed that FERA provisions would be applicable to virtual assets once the bill becomes law and the SBP Act is amended. He emphasized that the central bank is also preparing to launch its own digital currency, equal in value to the Pakistani rupee, to facilitate transactions in digital assets.
Despite the SBP’s clarity, legal experts and lawmakers raised concerns about enforceability. Shehroz Bakhtiyar, a legal consultant from the Ministry of Law and Justice, told the committee that “FERA cannot be implemented on digital assets in its present form” and suggested amendments would be necessary. Legislators echoed this view, highlighting the complexity of monitoring outbound digital transactions. PML-N Senator Afnanullah Khan pointed out that Pakistanis have already invested over $21 billion in digital assets, stressing the urgent need for legalisation and regulation.
The proposed PVARA Bill provides the broader framework for virtual assets and seeks to regularize trading in cryptocurrencies. The draft legislation has already been issued through an ordinance but requires parliamentary approval for permanent status. The Law Ministry noted that the bill would integrate global standards such as Financial Action Task Force (FATF) recommendations and Anti-Money Laundering (AML) provisions. Law Secretary Raja Naeem Akbar further confirmed that foreign crypto firms such as Binance would be required to set up offices in Pakistan to comply with the regime.
The SBP reiterated its cautious stance, noting that restrictions on banks and dealers engaging in digital currencies would remain until the new framework is implemented. In fact, the central bank recently blocked an attempt to legalize digital assets prematurely, warning of risks without proper regulation. It recalled its 2018 directive that declared cryptocurrencies such as Bitcoin, Litecoin, and Pakcoin as illegal tender, mandating banks to report crypto-related activity to the Financial Monitoring Unit.
The committee also debated governance aspects of PVARA. It agreed to place the authority under the Finance Ministry instead of the Cabinet Division for greater effectiveness. It also decided that the chairperson should be under 55 years old and possess at least five years of experience in digital finance and technology. Additionally, one senator and one National Assembly member will serve as members of the authority.
Under the proposed law, licensed digital service providers will be allowed to offer nine categories of services, including custody, exchange, lending and borrowing, derivatives, advisory, and fiat-referenced token issuance.
The Senate panel deferred further deliberations on the PVARA Bill until its next meeting, signaling that Pakistan’s path to regulating digital assets remains complex and politically sensitive.
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