Pakistan has taken a significant step towards regulating the digital asset market with the introduction of the “Virtual Assets Bill 2025,” presented by Senator Dr. Afnan Ullah Khan of the ruling party. This groundbreaking legislation seeks to establish a comprehensive framework for the use, trading, and management of cryptocurrencies and blockchain technologies, addressing a rapidly growing sector that has remained largely unregulated in the country. A copy of the bill reveals a vision for not only overseeing the digital asset space but also fostering economic growth and innovation through blockchain technology.
At the heart of the legislation is the creation of a Digital Rupee, a virtual currency pegged to the Pakistani Rupee (PKR) and regulated by the State Bank of Pakistan. This initiative aims to provide a secure and state-backed digital currency, bridging the gap between traditional fiat systems and modern financial technology. By tying the Digital Rupee to the national currency, the bill ensures stability and trust, creating a foundation for its adoption across various economic activities.
A key component of the bill is the establishment of Virtual Asset Zones, designated areas where the trading and management of cryptocurrencies will be governed under strict regulatory standards. These zones are designed to ensure financial stability, safeguard investors, and combat illicit activities such as money laundering and terrorism financing. To this end, the legislation imposes stringent anti-money laundering (AML) and counterterrorism financing (CTF) compliance measures, accompanied by regular audits and reporting requirements for entities operating within these zones. Transparency and accountability are central to the bill’s objectives, providing a framework to foster trust in the digital financial ecosystem.
The bill further proposes the creation of a National Virtual Assets Regulatory Commission to oversee the registration, licensing, and regulation of exchanges and service providers operating in the virtual asset market. The commission will monitor the issuance and maintenance of Pakistan Rupee-backed virtual assets, ensuring compliance with AML and CTF standards, and conduct audits of transactions to maintain transparency. Non-compliance with the proposed regulations will result in penalties, highlighting the government’s commitment to enforcing a secure and reliable regulatory environment.
Economic incentives form an integral part of the bill, with the identification of regions with surplus renewable energy or underutilized power plants to be designated as Virtual Asset Zones. These areas will be encouraged to develop blockchain projects and virtual asset operations through tax incentives for the first five years, contingent on compliance with AML and CTF regulations. Foreign investors are also being courted through three-year tax exemptions for investments in local blockchain initiatives or energy projects. This dual approach aims to attract international investment while leveraging local resources and infrastructure to boost economic activity.
The bill envisions allocating a significant portion of the revenue generated from virtual asset activities—one-third—to infrastructure development and educational programs focused on blockchain technology. This provision underscores the government’s intent to create a sustainable ecosystem by developing local talent and advancing technological capabilities. By investing in education and infrastructure, Pakistan hopes to nurture a skilled workforce capable of supporting the growth of the blockchain industry.
Entities seeking to operate in these Virtual Asset Zones will need to meet rigorous requirements, including demonstrating financial stability, adhering to AML and CTF protocols, and implementing robust cybersecurity measures to protect against digital threats. They will also be mandated to maintain customer transaction records and identification data for a minimum of five years, ensuring a high level of accountability and traceability within the system.
The Virtual Assets Bill 2025 represents a transformative step in Pakistan’s approach to digital finance. By addressing regulatory gaps and fostering innovation, the legislation has the potential to position Pakistan as a leader in blockchain technology and cryptocurrency adoption in the region. The introduction of the Digital Rupee, along with measures to attract foreign investment and encourage local blockchain development, underscores the government’s commitment to embracing the digital economy while safeguarding financial stability and investor confidence.
Globally, the move places Pakistan in alignment with nations that are proactively regulating the digital asset space. The bill reflects an understanding of the economic opportunities presented by blockchain technology while addressing associated risks through comprehensive oversight. If successfully implemented, the Virtual Assets Bill 2025 could pave the way for a thriving digital asset market in Pakistan, unlocking new opportunities for growth and innovation in the years to come.
