ISLAMABAD: Pakistan as the country moves from a ban on cryptocurrencies towards a regulated digital-asset market, Pakistan Virtual Asset Regulatory Authority (PVARA) Chairman Bilal Bin Saqib said on Thursday.
Addressing a press briefing, Saqib said Pakistan had moved towards legalising and regulating virtual assets within months, with PVARA becoming fully functional around six months after legislation was passed by parliament.
He said Pakistan was also considering the tokenisation of government debt and Roshan Digital Accounts (RDAs) as part of future digital-asset initiatives.
PVARA is also working on a Shariah advisory board to provide guidance on transactions involving digital and virtual assets. Saqib said the country’s mufti-e-azam had been taken into confidence and guidance was being sought on such transactions.
He estimated Pakistan’s crypto customer base at around 40 million and investments by Pakistanis in the sector at approximately $250 billion. He also pointed to India’s 30% tax on crypto transactions.
Separately, PVARA and the State Bank of Pakistan are devising a mechanism aimed at reducing the cost of sending remittances from 6.3% to 1%.
Saqib said the mechanism could save around $416 million on remittance flows of $41 billion by removing intermediary layers and enabling recipients to access funds within minutes.
Under the proposed model, overseas Pakistanis would send remittances in the currency of their country of residence, which would then be converted into a stablecoin before being transferred to the recipient.
A sandbox would first be required to provide greater visibility before stablecoins could be used for the transactions, he said.
Saqib acknowledged that ensuring full compliance with anti-money laundering and counter-terrorist financing requirements under the Financial Action Task Force (FATF) framework would be a major challenge.
An official from the Financial Monitoring Unit (FMU) said Suspicious Transaction Reports (STRs) would be submitted to the FMU for further action. The official acknowledged challenges in obtaining full customer visibility but said these could be addressed through deeper scrutiny.
PVARA is also engaging with international jurisdictions as it develops the regulatory framework. Saqib said Pakistan was negotiating memoranda of understanding with Kazakhstan and Kyrgyzstan, stressing that cross-border regulatory cooperation would be important for the functioning of digital assets.
Comparing the pace of regulatory development, he said Dubai took 17 months, Singapore 20 months and the UK 46 months, while Pakistan had made PVARA fully functional in around six months after the passage of legislation.
