Financial institutions told to refrain from virtual asset transactions 

ISLAMABAD: The State Bank of Pakistan (SBP) has clarified that it has not permitted financial institutions to engage in cryptocurrency or virtual asset transactions, citing the continued absence of a legal and regulatory framework in the country. 

Responding to recent reports linked to the National Assembly’s Standing Committee on Finance and Revenue, the central bank said it had already issued guidance back in 2018, advising all regulated entities, including banks, microfinance institutions, electronic money institutions, and exchange companies, to steer clear of any dealings involving virtual assets. 

The SBP stressed that its 2018 directive did not stem from any declaration of illegality but was intended as a precautionary step to shield financial institutions and their customers from potential risks. “These measures were taken solely because no legal or regulatory structure was in place for virtual assets,” the bank said in a statement. 

The central bank added that it is currently working with the Finance Division and the Pakistan Crypto Council, a body formed under federal oversight, to explore the possibility of establishing a proper framework for digital assets. 

“We believe a clear legal and regulatory structure will help protect investors and consumers while also defining the status of virtual assets in Pakistan,” the SBP stated. 

Despite increasing global interest in digital currencies, Pakistan has so far maintained a cautious stance, with authorities repeatedly warning against the risks associated with unregulated crypto trading. 

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