Despite a formal ban on cryptocurrency trading, Pakistanis have invested an estimated $20–25 billion in digital assets—placing the country among the top ten crypto markets in the world, according to recent assessments by Chainalysis and the Asian Development Bank. This sharp contrast between official restrictions and public participation was highlighted during a high-level discussion titled “The Future of Cryptocurrency in Pakistan,” organized by the Pakistan Business Council in Islamabad.
The session brought together economists, traders, and policy experts to examine the rapidly changing crypto environment both globally and within Pakistan. Dr. Asad Samar, CEO of Square Point Trading Group, opened the discussion by explaining the origins of cryptocurrency. He noted that digital assets were initially designed to enable peer-to-peer transactions without the involvement of banks or centralized financial institutions. Blockchain technology—essentially a distributed digital ledger—was introduced to secure these transactions by recording them in interconnected blocks that cannot be altered once verified.
Dr. Samar stressed that over time, cryptocurrencies have evolved far beyond their original payment-based purpose. Today, they form the backbone of a global digital economy valued in the trillions. Their rise has been driven not only by technological innovation but also by extraordinary price appreciation. Bitcoin, the flagship cryptocurrency, was priced between $500 and $700 in 2016; today, it has crossed the $100,000 threshold. This explosive growth has attracted millions of new investors worldwide, including a substantial number from Pakistan, where traditional investment opportunities remain limited and inflation continues to erode purchasing power.
The panel also shed light on the structure of global crypto markets. Currently, around 50 major exchanges operate internationally, though a handful dominate global trading volume. These platforms are heavily influenced by high-frequency trading firms, arbitrage funds, and institutional market makers that use sophisticated algorithms to exploit minute price differences across exchanges. As a result, daily crypto trading volume often surpasses that of some traditional financial markets, illustrating the scale at which digital assets now operate.
While many countries have moved toward formal regulation, Pakistan remains in a legal grey zone. Experts explained that the ban imposed in 2018 has neither halted crypto adoption nor reduced trading volumes. Instead, it has pushed Pakistani users toward unregulated and often unsafe trading channels. This shift has contributed to an estimated Rs600 billion in losses last year alone, largely due to fraud, hacked accounts, and the absence of investor protections.
Panelists argued that Pakistan must re-evaluate its regulatory stance. Rather than attempting to restrict a market that continues to thrive underground, policymakers could benefit from creating a structured framework similar to those adopted in the United States, the UAE, and several European countries. Such a framework could include:
- Licensing local exchanges
- Restricting high-risk and low-liquidity tokens
- Implementing KYC and AML regulations
- Introducing transparent tax obligations
- Ensuring consumer protection
However, the discussion also highlighted areas of concern. One of the major challenges is the compatibility of cryptocurrencies with Islamic finance principles. Because many digital assets derive value from speculation rather than physical backing, several Islamic finance scholars classify them as gharar, or excessive uncertainty. Pakistan’s financial sector is increasingly aligned with Shariah-compliant standards, making it difficult to integrate assets that lack intrinsic value or real-world linkage.
Another point of debate centered on the difference between decentralized cryptocurrencies and Central Bank Digital Currencies (CBDCs). Unlike private digital assets, CBDCs are fully regulated, traceable, and backed by state monetary authorities. Several countries, including China, Nigeria, and the Bahamas, have already launched digital versions of their national currencies to improve financial transparency and reduce cash-based leakages. Experts emphasized that Pakistan must clearly distinguish between these two categories, as they serve entirely different economic functions.
Despite emerging interest in establishing a Pakistan Crypto Council and a dedicated Virtual Assets Regulatory Authority, analysts warned that regulatory enthusiasm must be balanced with institutional capacity. Pakistan faces ongoing challenges in financial governance, documentation, and enforcement. Without strong oversight, premature legalization of crypto could expose the economy to new risks, including money laundering, capital flight, and increased volatility.
The session concluded with a consensus that Pakistan’s crypto dilemma cannot be resolved through bans alone. As long as millions of Pakistanis continue to invest—and billions of dollars flow through unregulated channels—the state will be compelled to develop a clear regulatory policy. Whether Pakistan can design a framework that protects investors, complies with global standards, aligns with Islamic finance, and strengthens financial governance remains an open question. What is clear, however, is that cryptocurrency has already become an undeniable part of Pakistan’s economic landscape, with or without official approval.