Recent moves by Pakistan’s government to cultivate a cryptofriendly environment starkly contradict the long-held warnings of its central bank.

In 2018, the State Bank of Pakistan (SBP) issued a stern warning cautioning financial institutions against the high risks of virtual currencies. Yet, in a dramatic policy reversal, the government has launched initiatives such as the Pakistan Crypto Council, seemingly eager to capitalise on global digital trends without first addressing unresolved regulatory deficiencies.

Globally, the digital asset revolution is gaining formidable momentum. There are now over 560 million crypto users worldwide, and emerging markets are witnessing robust growth. Crypto sectors in some regions are projected to grow at a compound annual rate of approximately 7.1 per cent, with markets such as India registering retail trading volumes of around $1.9 billion in the last quarter of 2024.

Nigeria reported that nearly 32pc of its population actively engages with digital currencies, generating transaction volumes estimated at $400m. In Brazil, stablecoins account for as much as 90pc of all crypto flows, highlighting how digital assets are becoming essential in regions where traditional banking infrastructure is limited.

Pakistan’s foray into cultivating crypto-friendly policies despite a deficient AML/CFT regime sparks serious regulatory concerns about volatile digital currencies

Yet, Pakistan’s rapid embrace of digital currencies appears to be a leap before looking. Although Pakistan made commendable strides in addressing its Financial Action........

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