Cryptocurrency and Blockchain: Assessing the Legal Framework in Pakistan
Abstract
The rapid global expansion of cryptocurrency and blockchain technologies has raised pressing questions about their regulation in Pakistan. Despite the growing adoption of virtual assets, the legal framework remains fragmented and largely prohibitive. The State Bank of Pakistan (SBP) through its 2018 circular barred financial institutions from engaging in virtual currency transactions, effectively restricting formal market activity. Meanwhile, the Securities and Exchange Commission of Pakistan (SECP) has explored regulatory options for DATPs but has not yet implemented a comprehensive licensing regime. This article aims to assess the existing legal framework governing cryptocurrency and blockchain in Pakistan, highlighting institutional roles, enforcement practices, and the influence of international obligations such as Financial Action Task Force (FATF) compliance. The research adopts a doctrinal approach, analyzing statutory directives, regulatory papers, judicial pronouncements, and enforcement actions to evaluate the strengths and shortcomings of current policy. The findings reveal a de facto prohibition on crypto transactions in the formal financial system, weak consumer protection, and heightened risks of fraud and money laundering. However, recent policy signals indicate a gradual shift toward compliance-based regulation. The study concludes that Pakistan’s regulatory future lies in a balanced framework that accommodates innovation while safeguarding macroeconomic stability and financial integrity
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