Bill in Works to Legalize Cryptocurrencies and Launch Digital Rupee in Pakistan
The Senate of Pakistan is set to deliberate on the Virtual Assets Bill 2025, introduced as a private member’s bill by Senator Dr. Afnan Ullah Khan. This bill aims to regulate the rapidly expanding domain of virtual assets, including cryptocurrencies and blockchain technologies, within the country. By establishing a comprehensive legal framework, the bill seeks to govern the issuance, trading, and utilization of virtual assets backed by the Pakistani Rupee (PKR).
A key feature of the bill is the proposal to launch a Digital Rupee, backed by PKR and regulated under the central bank’s guidelines. This digital currency will be recognized as authorized legal tender, paving the way for Pakistan’s entry into the global digital financial ecosystem while ensuring compliance with national regulations.
The bill also envisions the creation of virtual asset zones to promote financial stability, protect investors, and curb illegal activities associated with virtual assets. By addressing these challenges, the legislation aims to position Pakistan as a responsible participant in the rapidly evolving digital economy.
Guidelines for Registration and Licensing
The Virtual Assets Bill 2025 provides detailed guidelines for the registration and licensing of virtual currency zones, exchanges, and asset providers. It mandates compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, ensuring a secure and transparent framework for all virtual asset operations in Pakistan.
Transparency and Accountability
The bill introduces measures to promote transparency in the virtual currency market by requiring regular audits and reports from entities managing and trading virtual assets. These steps aim to build trust and ensure accountability within Pakistan’s financial system.
Establishment of the National Virtual Assets Regulatory Commission
If enacted, the bill will establish a National Virtual Assets Regulatory Commission to oversee its implementation. The commission will:
- Assess the efficacy, risks, and vulnerabilities of virtual assets.
- Develop regulatory frameworks for managing virtual assets.
- Register and license virtual asset zones, exchanges, and service providers.
- Oversee the issuance and maintenance of PKR-backed virtual assets.
- Enforce AML/CTF standards and penalize non-compliance.
Virtual Assets Zones
The federal and provincial governments will designate specific regions as virtual assets zones, prioritizing areas with underutilized or renewable energy-powered facilities. The commission will maintain a public register of licenses for these zones, allowing transparency in application processing, license issuance, and revocation.
License Requirements for Exchanges and Service Providers
All virtual currency exchanges and service providers must secure licenses from the commission, demonstrating business registration, financial stability, AML/CTF compliance measures, and cybersecurity protocols. These requirements ensure a robust operational environment for virtual assets.
Tax Incentives
To encourage growth in the sector, the government will:
- Offer reduced corporate taxes for the first five years of operation in designated virtual asset zones, contingent on AML/CTF compliance.
- Mandate that exchanges and service providers adhere to customer due diligence (CDD) and suspicious activity reporting requirements.
- Require entities to maintain transaction records and customer identification data for at least five years.
Foreign Investment
To encourage foreign investors, the government will offer tax exemptions for three years to individuals or entities contributing to local blockchain development projects or power plants. Additionally, one-third of the revenue generated from virtual asset operations will be allocated to developing local infrastructure and funding educational programs focused on blockchain technology.
