Karachi, May 30, 2025 – The State Bank of Pakistan (SBP) has issued a comprehensive clarification regarding the legal status of cryptocurrency in the country, reiterating its earlier stance on the issue.
The statement, prompted by recent news reports referencing the 14th meeting of the National Assembly’s Standing Committee on Finance and Revenue, aims to provide clarity on SBP’s position regarding Virtual Assets (VAs), including cryptocurrencies such as Bitcoin, Litecoin, and others.
According to the SBP, its 2018 advisory to financial institutions—including Banks, Development Finance Institutions (DFIs), Microfinance Banks (MFBs), Electronic Money Institutions (EMIs), Payment System Operators (PSOs), Payment Service Providers (PSPs), and Exchange Companies—was not issued because cryptocurrency was declared illegal in Pakistan. Instead, the advisory was issued due to the absence of a formal legal and regulatory framework for VAs in the country. This step was taken as a precaution to protect regulated entities and their customers from potential financial risks associated with unregulated digital currencies.
The SBP emphasized that until a comprehensive legal framework is in place, virtual currencies remain outside the realm of authorized financial activity in Pakistan. To address this gap, the SBP, along with the Finance Division, is actively working with the Pakistan Crypto Council—an advisory body established by the federal government—to draft a legal and regulatory framework for VAs. According to the central bank, such a framework would ensure greater clarity and legal protection for consumers and investors in the future.
The SBP also reaffirmed the contents of its April 2018 public notice (Circular No. 03 of 2018), cautioning the general public about the risks of dealing in cryptocurrencies. The notice stated that virtual currencies such as Bitcoin, OneCoin, DasCoin, Pakcoin, and others are not recognized as legal tender in Pakistan. Moreover, no individual or institution is authorized by SBP to issue, buy, sell, or invest in any such digital assets. Regulated financial institutions are prohibited from facilitating any transactions involving virtual currencies or Initial Coin Offerings (ICOs).
The SBP highlighted several inherent risks linked with cryptocurrencies. These include extreme price volatility, business failures or shutdowns of crypto exchanges, and vulnerability to hacking and cyberattacks. Numerous global incidents have shown that users can lose significant sums due to the collapse or compromise of cryptocurrency platforms. Additionally, the anonymity offered by these digital assets makes them susceptible to misuse for illegal activities such as money laundering and fraud.
Another major concern raised by SBP is the proliferation of fraudulent investment schemes in Pakistan. Many of these schemes operate under pyramid or Ponzi structures, luring unsuspecting individuals with promises of high returns through fake tokens or coins. The SBP warned that such scams can lead to substantial financial losses for the general public.
The central bank also reiterated that all domestic and international payment and money transfer services in Pakistan are regulated under applicable SBP laws. Any person or entity using virtual currencies for transferring value outside Pakistan may face legal action.
In light of the above, the SBP strongly advises the public to avoid mining, trading, exchanging, or promoting cryptocurrencies until an appropriate regulatory framework is established. The SBP remains committed to safeguarding the integrity of the financial system and protecting consumers from unregulated and high-risk financial activities.