Pakistan enacts landmark law to regulate virtual assets, plans pilot for digital currency

Pakistan enacts landmark law to regulate virtual assets, plans pilot for digital currency
Representations of cryptocurrency Bitcoin and words "$100.000" are seen in this illustration taken November 24, 2024. (File/ REUTERS)
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Updated 09 July 2025
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Pakistan enacts landmark law to regulate virtual assets, plans pilot for digital currency

Pakistan enacts landmark law to regulate virtual assets, plans pilot for digital currency
  • New authority to license and supervise virtual asset firms
  • Shariah board and digital sandbox included in framework

KARACHI: Pakistan has formally enacted its first law to regulate virtual assets, establishing a federal authority to license and oversee crypto-related businesses, the finance ministry said on Wednesday, as the country joins a growing list of nations adopting formal oversight of blockchain-based finance.

The Virtual Assets Act, 2025 creates the Pakistan Virtual Asset Regulatory Authority (PVARA), a new autonomous regulator to supervise the virtual asset economy, ensure compliance with global anti-money laundering standards and support financial innovation through regulatory sandboxes.

Pakistan’s move aligns with similar frameworks adopted by global peers such as the United Arab Emirates, Singapore, India, and the European Union, where regulators have introduced crypto-specific licensing, centralized oversight authorities, and pilot programs for central bank digital currencies (CBDCs).

The State Bank of Pakistan has also separately announced it is preparing to launch a pilot for a digital rupee, marking a broader shift toward digital modernization of Pakistan’s financial system.

“The Authority has been granted comprehensive powers to ensure transparency, compliance, financial integrity, and the prevention of illicit activities, in alignment with international standards including those of the Financial Action Task Force (FATF),” the finance ministry said, describing the powers of the new regulator set up under the Virtual Assets Act.

Separately, speaking at the Reuters NEXT Asia summit in Singapore on Wednesday, Governor State Bank Jameel Ahmad said the new law would “lay down the foundations for the licensing and regulation” of the virtual assets sector and that the central bank was already in touch with some tech partners.

He said a legal framework for virtual assets was necessary to “evaluate and manage the risk very carefully, and at the same time not allow to let go the opportunity.”

In May, the State Bank clarified that virtual assets were not illegal but advised financial institutions not to engage with them until a formal licensing framework was in place.

NEW POWERS

The new regulator will introduce a structured licensing regime for all firms offering services related to cryptocurrencies, digital tokens and blockchain-based assets in or from Pakistan. These entities must meet operational and compliance standards and will be subject to ongoing reporting obligations.

The law gives PVARA powers to combat illicit finance and enforce transparency in line with the FATF framework, a key benchmark for Pakistan, which was removed from the FATF grey list in 2022 after significant reforms.

The regulator’s governing board will include top officials from Pakistan’s economic and regulatory institutions: the governor of the State Bank of Pakistan, secretaries of finance, law, IT and telecom, as well as the chairpersons of the Securities and Exchange Commission of Pakistan, the Federal Board of Revenue and the Digital Pakistan Authority.

Two independent directors with expertise in law, technology, or finance will also be appointed by the federal government.

The chairperson of the Authority, who will lead PVARA’s operations, is to be selected based on “demonstrated experience in finance, law, technology, or regulatory affairs,” according to the statement.

In a nod to Pakistan’s Islamic financial system, the law mandates the creation of a Shariah Advisory Committee to advise PVARA on the religious permissibility of virtual asset products and services. Any licensed firm offering Shariah-compliant services must adhere to this committee’s rulings.

To handle disputes, the law also establishes a Virtual Assets Appellate Tribunal, which will operate independently and include experts in law, finance, and technology to hear appeals against regulatory decisions.

The legislation provides space for responsible innovation by allowing startups and developers to test blockchain-based products within a regulatory sandbox, a controlled environment supervised by PVARA.

The authority may also issue no-action letters, temporarily exempting experimental projects from certain rules under defined conditions.

DIGITAL RUPEE

The enactment of the new law builds on recent crypto-focused developments in Pakistan.

In March 2025, the government-backed Pakistan Crypto Council (PCC) was launched to support blockchain and virtual asset adoption. It has already initiated conversations with global crypto firms and plans to explore bitcoin mining using surplus energy. It has also appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve. It has also held talks with US-based crypto firms, including the Trump-linked World Liberty Financial.

Meanwhile, the State Bank of Pakistan is preparing a pilot project for a digital rupee, Governor Ahmad said while speaking at the Reuters NEXT Asia summit.

Pakistan was “building up our capacity on the central bank digital currency” and hoped to roll out a pilot soon, Ahmad said. 

With inputs from Reuters


Glacial floods alert issued for northwest Pakistan with more heavy rain forecast

Glacial floods alert issued for northwest Pakistan with more heavy rain forecast
Updated 26 July 2025
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Glacial floods alert issued for northwest Pakistan with more heavy rain forecast

Glacial floods alert issued for northwest Pakistan with more heavy rain forecast
  • Pakistan is seeing above-normal monsoon rains, raising fears of a repeat of the 2022 floods
  • Despite low emissions, the country remains among the most climate-vulnerable nations

PESHAWAR: Pakistan on Saturday warned of glacial flooding in the northwest with more rain forecast for the area in the coming week.

Downpours are heavier in Khyber Pakhtunkhwa province than the same period last year, prompting weather adviseries and alerts for flooding from glacial lake outbursts, said Anwar Shahzad, a spokesperson for the local disaster management authority.

A letter from the authority sent out mid-July said “persistent high temperatures may accelerate snow and glacier melt and subsequent weather events” in vulnerable parts of the region.

Dr. Abdul Samad, from the Khyber Pakhtunkhwa Tourism Department, said rescue teams evacuated more than 500 holidaymakers from Naran after a cloudburst overnight Friday caused a road closure. Authorities deployed heavy machinery to remove debris and restore access.

In the neighboring Gilgit-Baltistan region, the government said it had distributed hundreds of tents, thousands of food packets, and medicine to flood-affected communities.

Spokesperson Faizullah Firaq said Saturday there was “severe destruction” in some areas and damage to houses, infrastructure, crops, and businesses.

Search operations were underway to find missing people on the Babusar Highway, where flooding struck nine villages. Helicopters rescued tourists stuck in the popular spot of Fairy Meadows, he added.

Pakistan has received above-normal rainfall this monsoon season, raising concerns of a repeat of the devastating 2022 floods that submerged a third of the country and killed 1,737 people. Some 260 have died across Pakistan so far this season, which runs through to mid-September.

Pakistan is one of the countries most vulnerable to climate change, but one of the lowest contributors to greenhouse gas emissions.


Pakistan PM pledges sustained diplomatic push to end Gaza aid blockade

Pakistan PM pledges sustained diplomatic push to end Gaza aid blockade
Updated 26 July 2025
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Pakistan PM pledges sustained diplomatic push to end Gaza aid blockade

Pakistan PM pledges sustained diplomatic push to end Gaza aid blockade
  • Israel’s blockade has drastically restricted access of food, water and medical supplies
  • UN, aid groups warn of mass starvation and malnutrition, especially among children

ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday vowed to continue diplomatic efforts to challenge Israel’s aid and humanitarian blockade in Gaza, as he spoke by phone with Hafiz Naeem-ur-Rehman, leader of the Jamaat-e-Islami (JI) party, which has been actively supporting deliveries of basic necessities to Palestinians.

In recent weeks, Gaza has faced a worsening humanitarian crisis, as Israel’s blockade, imposed since the beginning of March, has drastically restricted access of food, water and medical supplies.

The United Nations and aid groups have warned of mass starvation and malnutrition, especially among children, with only a few aid trucks allowed to enter Gaza, which is home to about two million inhabitants.

“Pakistan will continue vigorous diplomatic efforts to end Israel’s suspension of aid to Gaza and restore delivery of food and essential supplies to starving Palestinian brothers and sisters,” Sharif said, as per a statement shared by his office.

He also reaffirmed Pakistan’s moral and diplomatic support for the people of Palestine, commending JI and its charitable arm, Al-Khidmat Foundation, for their domestic campaigns to raise and send relief aid to Gaza.

The JI chief urged Sharif to lobby the international community to help facilitate a ceasefire and humanitarian corridor into Gaza, saying that Palestinians and the entire Muslim world look to Pakistan for leadership.


US, Central Asian defense chiefs join Pakistan for rare regional security talks in Islamabad

US, Central Asian defense chiefs join Pakistan for rare regional security talks in Islamabad
Updated 26 July 2025
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US, Central Asian defense chiefs join Pakistan for rare regional security talks in Islamabad

US, Central Asian defense chiefs join Pakistan for rare regional security talks in Islamabad
  • Pakistan’s army chief calls for military-to-military cooperation, strategic dialogue amid hybrid and transnational threats
  • The participants expressed commitment to upholding peace and confronting challenges like militancy, cyber insecurity

ISLAMABAD: Pakistan hosted a rare regional defense conference on Saturday, with officials from the United States joining their counterparts from four Central Asian republics to discuss enhanced military cooperation and counterterrorism coordination in the neighborhood.

The US maintained a significant military presence in the region through Afghanistan until the withdrawal of international forces in August 2021. The conference in Islamabad marked the first multilateral defense engagement of its kind hosted by Pakistan amid a gradual thaw in relations between Islamabad and Washington, with participation from Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Many of the participating Central Asian states share borders with or lie close to Afghanistan and remain exposed to the spillover effects of militant violence, narcotics trafficking and regional instability.

Pakistan, which shares a porous frontier with Afghanistan, has repeatedly called for deeper security cooperation to confront shared threats in the aftermath of the Afghan conflict.

“In an era defined by transnational threats and complex hybrid challenges, the imperative for deeper military-to-military cooperation, strategic dialogue and mutual trust is paramount,” Pakistan’s Chief of Army Staff Field Marshal Syed Asim Munir said during his opening address, according to a statement released by the military’s media wing.

“Pakistan remains fully committed to working with partner nations to build a secure and prosperous regional environment,” he added.

Earlier, the army chief welcomed the participants of the Regional Chiefs of Defense Staff Conference, held under the theme “Strengthening Bonds, Securing Peace.”

The event focused on strengthening regional security partnerships, expanding joint training efforts and improving crisis response mechanisms.

Delegates also discussed the strategic landscape in South and Central Asia, with emphasis on evolving threats, sovereignty concerns and military diplomacy.

The official statement said the participants reaffirmed their commitment to upholding peace, respecting national sovereignty and confronting common challenges including militant violence and cyber insecurity.

Delegates praised Pakistan’s role in convening the meeting and commended its leadership, hospitality and efforts to promote regional defense diplomacy.


PM Sharif orders swift release of funds for remittance scheme after record $38.3 billion inflows

PM Sharif orders swift release of funds for remittance scheme after record $38.3 billion inflows
Updated 26 July 2025
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PM Sharif orders swift release of funds for remittance scheme after record $38.3 billion inflows

PM Sharif orders swift release of funds for remittance scheme after record $38.3 billion inflows
  • Workers’ Remittances Incentive Scheme encourages overseas Pakistanis to use official banking channels
  • The scheme offers priority processing, fee waivers and reward points for frequent or high-volume senders

KARACHI: Prime Minister Shehbaz Sharif on Saturday directed the finance ministry to release funds on a priority basis for the Workers’ Remittances Incentive Scheme, reaffirming his administration’s commitment to facilitating formal remittance flows after overseas Pakistanis sent a record $38.3 billion in the last fiscal year.

The scheme, introduced in 2023, aims to encourage Pakistanis living abroad to use official banking channels instead of informal networks such as hawala or hundi. It offers benefits including simplified digital transfers, priority processing, fee waivers and reward points for frequent or high-volume senders.

The program is also integrated with Roshan Digital Accounts (RDAs), which allow non-resident Pakistanis to invest in domestic stocks, real estate and government securities.

“Overseas Pakistanis are our strength and a national asset,” Sharif said in a statement issued by the Prime Minister’s Office. “Their hard-earned remittances play a vital role in Pakistan’s development, and the entire nation, including myself, holds them in the highest regard.”

The prime minister noted that remittances have not only helped meet Pakistan’s rising import bill but have also contributed to strengthening foreign exchange reserves.

“From laborers to entrepreneurs, every overseas Pakistani is playing a part in the country’s progress,” he added.

Sharif said the surge in remittances during FY2025 was key to achieving Pakistan’s first current account surplus in 14 years.

He also pledged to remove administrative and procedural bottlenecks in the remittance system, calling for it to be made “simpler, more transparent and more efficient.”

Remittances form the backbone of Pakistan’s economy, providing a vital source of foreign exchange that eases pressure on the current account and supports millions of households through spending on education, health care and daily needs.

In times of crisis, they have served as a financial lifeline, helping stabilize reserves and maintain macroeconomic balance.


Pakistan vows to eliminate ‘Indian-sponsored’ militants amid Balochistan insurgency spike

Pakistan vows to eliminate ‘Indian-sponsored’ militants amid Balochistan insurgency spike
Updated 26 July 2025
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Pakistan vows to eliminate ‘Indian-sponsored’ militants amid Balochistan insurgency spike

Pakistan vows to eliminate ‘Indian-sponsored’ militants amid Balochistan insurgency spike
  • Mohsin Naqvi, Sarfraz Bugti meet in Quetta, review counterterror efforts in Balochistan
  • They highlight full federal-provincial coordination against separatist groups like the BLA

QUETTA: Pakistan on Saturday vowed to bring what it described as “Indian-sponsored” militants to justice, as federal and provincial leaders met in Quetta to address a growing wave of insurgent attacks in Balochistan, the country’s largest and most volatile province.

Balochistan, which borders Afghanistan and Iran, is strategically significant due to its vast mineral resources and its role as a transit hub for the China-Pakistan Economic Corridor (CPEC). However, the province has long been plagued by a separatist insurgency, with militant groups such as the Balochistan Liberation Army (BLA) intensifying their attacks in recent years.

Islamabad describes these groups as proxies for Indian intelligence, branding them “Fitna-e-Hindustan”, or India’s mischief. New Delhi denies any nexus with these groups.

Federal Interior Minister Mohsin Naqvi and Balochistan Chief Minister Mir Sarfraz Bugti held a high-level law and order meeting to review the ongoing counterterror operations and the implementation of a new Provincial Action Plan aimed at stabilizing the region.

“Indian-sponsored terrorists and their facilitators have no place to hide in Pakistan and will be brought to justice at all costs,” Naqvi said while chairing the meeting, according to an official statement. “Those challenging the writ of the state will be dealt with an iron hand.”

The interior minister said the federal government stood “shoulder to shoulder” with the Balochistan government in its war, adding that full coordination exists between national and provincial authorities.

Bugti briefed the meeting on Balochistan’s Provincial Action Plan, which he also mentioned earlier this month.

He noted that it focused on intelligence-led operations, faster threat response, and outreach to disaffected youth. It also highlighted bureaucratic and operational bottlenecks that have hindered previous efforts.

“This war is not only the responsibility of the security forces but of the entire nation,” he said. “The sacrifices of our people and institutions will not go in vain.”

Balochistan has witnessed several high-profile militant attacks since the beginning of the year. Among them, a passenger train hijack by the BLA in March and a suicide bombing in May targeting a school bus in Khuzdar that killed several children made international headlines.

The separatist insurgents also routinely target security forces, civilians, and non-local workers in coordinated and targeted attacks.