Federal Board of Revenue (FBR) has initiated consultations with experts to prepare a legislative framework for formally introducing cryptocurrency in Pakistan. The step follows directives issued by the Federal Tax Ombudsman (FTO) after receiving a complaint urging FBR to clarify its tax policy regarding digital currencies. The move aims to regulate the rapidly growing crypto market in Pakistan and ensure that income and assets generated through digital transactions fall within the country’s taxation system.
The FTO highlighted that despite the global boom in digital currencies—with over 560 million users worldwide and around nine million in Pakistan—the sector remains largely unregulated in the country. Pakistan ranks as the sixth-largest nation in terms of cryptocurrency adoption, reflecting strong public and institutional interest in this emerging financial space. The State Bank of Pakistan, in its circular dated April 6, 2018, titled “Risks of Virtual Currencies,” did not ban digital currencies but warned of associated risks. This ambiguity has left a significant legal and fiscal gap that policymakers now aim to address through formal legislation.
According to the FTO, large-scale transactions continue to take place in the crypto market outside the tax system, creating a serious challenge for revenue monitoring. The absence of regulation has allowed profits and assets generated through cryptocurrency trading to remain undocumented and untaxed. The FTO termed this situation a reflection of administrative negligence and emphasized that introducing well-defined legal provisions could bring this parallel economy under the tax net. It also noted that adopting clear regulations for digital currencies could help the government counter tax evasion and ease revenue shortfalls.
Internationally, several countries have begun integrating digital assets into their financial frameworks. Under the Financial Crimes Enforcement Network (FinCEN) in the United States, crypto miners are considered money transmitters and must comply with corresponding financial regulations. The FTO recommended that Pakistan follow similar global standards to establish a transparent and accountable system. Ensuring compliance with international norms will also support Pakistan’s efforts in curbing money laundering and improving its financial governance reputation.
FBR’s Policy Wing confirmed that the issue is under detailed technical review and consultations are ongoing with local and international experts. The FTO further advised FBR to engage with all key stakeholders, including the complainant, policymakers, and representatives from the crypto industry, to gather input before drafting the final legislation. It also urged the inclusion of cryptocurrency provisions in the upcoming Finance Bill to ensure timely implementation.
The introduction of a structured crypto regime could mark a significant development for Pakistan’s financial landscape by broadening the tax base and encouraging responsible participation in digital asset markets. With the rapid evolution of fintech globally, such a move could position Pakistan to leverage blockchain-based innovation while maintaining fiscal discipline and oversight.
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