Just two years after declaring that cryptocurrencies would “never be legalised,” Pakistan has taken a dramatic policy turn.
In May 2025, the country launched the Pakistan Virtual Assets Regulatory Authority (PVARA), marking a sharp shift from prohibition to structured regulation in the digital asset space, CryptoPolitan reported.
The newly formed body has been tasked with overseeing crypto exchanges, establishing tokenisation and mining standards, and ensuring alignment with international practices.
The global response to Pakistan’s move was swift. Within 24 hours, Israel’s Knesset initiated its first informal debate on Bitcoin.
Although the session did not result in new legislation, it raised many of the same questions Pakistan is already addressing: how decentralised technologies might bolster economic inclusion, support trade, and reframe national security in an increasingly digital world.
The development has prompted countries like India and Israel to reassess their own crypto strategies. This renewed interest in crypto regulation comes at a critical juncture.
Bitcoin’s price has surged past $115,000, buoyed by growing institutional investment, regulatory clarity in select regions, and shifts in geopolitical dynamics, particularly in the Middle East.
Meanwhile, the United States is advancing federal crypto legislation, and countries like Turkey, Nigeria, and Argentina are reconfiguring their financial frameworks to manage inflation and currency instability.
Pakistan’s move is part of a broader trend among emerging markets. Nigeria is experimenting with regulatory sandboxes to spur fintech innovation, while Argentina is contemplating integrating stablecoins and digital wallets into its economy. India, too, is quietly reconsidering its previously rigid stance on crypto amid rising demand from its developer and digital commerce sectors.
What sets Pakistan apart is the speed and clarity of its policy transition. In under four months, the country moved from banning crypto entirely to setting up a regulatory framework, announcing plans for a sovereign Bitcoin reserve, and inviting both local and international exchanges to register under its jurisdiction.
All of this is being carried out with an eye on compliance with Financial Action Task Force (FATF) standards and a commitment to building institutional capacity in digital asset governance.
This policy overhaul also reflects deeper societal and economic shifts. Pakistan is home to over 116 million internet users, produces 50,000 computer science graduates annually, and boasts a digital freelance workforce exceeding four million.
For a significant portion of the population, particularly the youth, crypto is not just a speculative asset but a practical tool for remittances, payments, and savings amidst a volatile local currency and limited access to global financial systems.
On the strategic front, Pakistan’s embrace of crypto regulation signals a desire to lead, not follow. By engaging with countries like El Salvador, initiating global knowledge-sharing partnerships, and establishing itself as a regulatory frontrunner, Islamabad is asserting that economic inclusion and digital sovereignty can go hand in hand.
It also underscores that emerging economies need not wait for Western capitals to dictate the pace or direction of digital finance.
In an era marked by geopolitical fragmentation, digital assets may provide a rare platform for cross-border cooperation. Whether this becomes the catalyst for widespread crypto regulation or merely inspires cautious experimentation remains to be seen.
But one thing is clear: the debate around cryptocurrencies has evolved from a financial question to one of national policy and future readiness.
And in this evolving narrative, Pakistan is no longer on the sidelines. It is helping shape the very framework of tomorrow’s global digital economy.
