From Ban to Embrace: Pakistan's "Ice and Fire" Journey in Cryptocurrency
Written by: KarenZ, Foresight News
In the northwestern part of the South Asian subcontinent, a country with a population of 241 million and a highly youthful demographic—Pakistan—is quietly nurturing a transformation regarding cryptocurrency.
Although the cryptocurrency market in Pakistan currently remains in a "gray area," the continuous growth of the user base and the gradual clarification of the regulatory framework suggest that this land is poised to emerge as an important hub for the crypto economy in South Asia.
On April 7, Zhao Changpeng announced his appointment as a strategic advisor to the Pakistan Crypto Council (PCC). This move not only highlights Zhao Changpeng's influence in the global cryptocurrency industry but also signifies a milestone step for Pakistan in the cryptocurrency field. As the official strategic advisor of the PCC, Zhao Changpeng will provide guidance on regulatory frameworks, infrastructure, education, and application promotion, working closely with the Pakistani government and the private sector to build a compliant, inclusive, and globally competitive crypto ecosystem.
Seizing this opportunity, let us delve into the structure of the Pakistan Crypto Council and the current state of cryptocurrency regulation and adoption in the country.
Structure of the Pakistan Crypto Council
The Pakistan Crypto Council (PCC) was proposed by the Ministry of Finance in February 2025 and officially announced in March. Its main responsibility is to oversee the integration and adoption of blockchain technology and digital assets in the country's financial sector.
The council's focus is not limited to regulation; it also aims to create an environment where blockchain and digital finance can thrive, avoiding market chaos caused by regulatory gaps. Additionally, the PCC is committed to promoting responsible innovation, advancing the innovative application of cryptocurrency technology in Pakistan while protecting consumers and ensuring financial security. The organizational structure of the PCC is as follows:
Finance Minister Muhammad Aurangzeb serves as the chairman of the council, indicating the Pakistani government's commitment to the evolving digital economy. Bilal bin Saqib, who serves as the CEO of the council, is also the chief advisor to the finance minister. Bilal bin Saqib is an entrepreneur from London with a master's degree in social innovation and entrepreneurship from the London School of Economics (LSE) and has been featured on Forbes' 30 Under 30 list. In the Web3 space, Bilal bin Saqib is the founder of the Pakistan Web3 community Web3 Pak and has served as a growth advisor for the African digital asset platform Busha. He frequently speaks at various crypto-related events, sharing experiences on the social impact of blockchain. In addition to his work in fintech, Bilal bin Saqib was previously awarded the 1632nd Point of Light Award (an award given by the UK Prime Minister to individuals who have made outstanding contributions to their communities), co-founded the nonprofit organization Tayaba (which provides clean water solutions to water-scarce communities in Pakistan), and launched the H2O Wheel (an innovative water transport device that alleviates burdens in rural communities). In 2023, he was awarded the MBE medal for his humanitarian efforts during the COVID-19 pandemic.
The board members directly under the PCC include the Governor of the State Bank of Pakistan, the Chairman of the Securities and Exchange Commission of Pakistan (SECP), the Federal Minister of Law, and the Federal Minister of Information Technology. This diverse combination ensures that regulatory oversight, financial stability, legal frameworks, and technological advancements align closely with Pakistan's crypto ecosystem.
Pakistan's Finance Minister and PCC Chairman Muhammad Aurangzeb stated, "We are sending a clear signal to the world that Pakistan is opening its doors to innovation. With CZ's involvement, we will accelerate our vision of making Pakistan a regional powerhouse driven by Web3, digital finance, and blockchain development."
Overview of Pakistan
Pakistan is located in the northwestern part of the South Asian subcontinent, bordered to the south by the Arabian Sea, to the north by the Karakoram and Himalayan mountains, and sharing borders with India, China, Afghanistan, and Iran to the east, north, and west, respectively. It is a key country connecting South Asia, the Middle East, and Central Asia.
Pakistan has a land area of 796,000 square kilometers. In terms of demographic structure, the country has a significant population dividend, being the fifth most populous country in the world, with over 60% of the population under the age of 30. Naturally, the labor force is also among the largest globally.
According to the Seventh National Population Census Report released by the Pakistan Bureau of Statistics in July 2024, the total population of Pakistan has reached approximately 241 million, an increase of 15.87% compared to the sixth census in 2021, with an annual population growth rate of 2.55%. About 79% of the population is under 40 years old, with children under 15 years old accounting for 40.56% of the total population, and youth aged 15 to 29 making up 26%.
Economically, Pakistan currently faces multiple challenges, including high inflation, a foreign debt crisis, and currency devaluation. However, the government is seeking breakthroughs through international aid, structural reforms, and digital development.
In terms of education, Pakistan offers free education at the primary and secondary levels, but the number of schools is insufficient, and the education penetration rate is low. Additionally, inadequate infrastructure and socioeconomic factors collectively hinder educational progress. According to data from UNICEF, Pakistan has the second-highest number of out-of-school children in the world, with approximately 25 million children (ages 5-16) unable to attend school, accounting for 44% of the total population in that age group. This situation is particularly pronounced and severe in rural areas and among girls.
In terms of infrastructure, power shortages and a low internet penetration rate (around 50%) limit technological development. It is worth mentioning that Pakistan's state religion is Islam, with Muslims making up 97% of the total population.
The Three-Act Evolution of Cryptocurrency Regulation in Pakistan
Pakistan's cryptocurrency regulation is currently transitioning from a ban to exploratory regulation. Although the legal situation remains unclear, the government's softened stance, the establishment of the national cryptocurrency council, international cooperation, and a high adoption rate among the public indicate that the country may soon introduce a clearer policy framework.
Ban Phase (2018 to 2021): In April 2018, a ban issued by the State Bank of Pakistan (SBP) stated: "Virtual currencies are not legal tender issued or guaranteed by the Government of Pakistan. All banks, development finance institutions, microfinance banks/public service organizations/public service providers, etc., are advised not to process, use, trade, hold, transfer value, promote, or invest in virtual currencies, and banks/development finance institutions/microfinance banks are also required not to assist their customers/account holders in virtual currency/ICO token transactions. Any such transactions should be immediately reported as suspicious transactions to the Financial Monitoring Unit (FMU)." The ban also advised the public to exercise caution for their own benefit and not to engage in activities related to virtual currency mining, trading, exchanging, value transfer, promotion, and investment to avoid any potential financial losses and legal consequences, but it did not explicitly restrict individual holdings or P2P transactions, placing cryptocurrency in a legal gray area. Shortly thereafter, the Pakistani Bitcoin trading platform Urdubit completely shut down.
Exploratory Phase (2022 to 2024): The continuous expansion of the cryptocurrency scale has prompted central banks and financial regulators worldwide to study and analyze the crypto ecosystem. In 2022, the State Bank of Pakistan (SBP) released a report titled "Cryptographic Assets—Potential Risks and Opportunities and Global Regulatory Approaches," which reiterated the previous virtual currency ban but also pointed out that crypto assets are becoming increasingly popular among certain groups globally due to their convenience, anonymity, and speculative nature. It listed several challenges faced by crypto assets, including impacts on monetary policy, foreign exchange systems, capital flight, financial stability, and risks of being used for money laundering, terrorism financing, and tax evasion.
In February 2022, based on a speech by former SBP Governor Reza Baqir on February 6, 2022, titled "The Rise of Digital Currency and the Future Path," Pakistan is experiencing a rapid shift from cash to digital payments, with a large mobile user base (189 million telecom users, 108 million 3G/4G users, etc.), providing favorable conditions for digitization. Pakistan is actively embracing digital transformation, viewing it as a significant opportunity for the development of its financial system, although it maintains a cautious stance towards private digital currencies, believing that the risks of virtual currencies outweigh the benefits. Meanwhile, Reza Baqir held an optimistic view on CBDCs, believing they could promote inclusivity, innovation, and cross-border payments. He also called on regulators to not only establish rules but also to proactively innovate and drive the development of the financial ecosystem.
However, in March 2023, the Pakistani government planned to suspend online cryptocurrency services in the country to prevent illegal trading of digital assets. Former State Minister for Finance Aisha Ghaus Pasha revealed that Pakistan "will never legalize cryptocurrency."
In June 2023, the State Bank of Pakistan announced plans to launch a central bank digital currency. In November 2024, the federal government proposed amendments to the State Bank of Pakistan Act to legalize (central bank-issued) digital currency in Pakistan. The new amendment also proposed penalties for the unauthorized issuance of digital currency. Anyone found to be illegally issuing digital currency will be fined an amount equivalent to twice the value of the illegal issuance.
Icebreaking Phase (2025): As we enter 2025, Pakistan's attitude towards digital currency has undergone a substantial shift, planning to create a legal framework for cryptocurrency trading to attract international investment. In March of this year, Pakistan officially established the Pakistan Crypto Council (PCC). The council's CEO, Bilal Bin Saqib, proposed leveraging the country's surplus energy to promote Bitcoin mining.
It is noteworthy that in 2018, Pakistan was placed on the Financial Action Task Force (FATF) "grey list" of jurisdictions under increased monitoring, which led the government and the central bank to examine the legality and potential risks of cryptocurrency. With the FATF removing Pakistan from the "grey list" in 2022 and the booming global crypto market, the improved international financial environment may bring new opportunities for the cryptocurrency market, albeit accompanied by expectations of stricter regulation. Bilal bin Saqib has stated that the PCC is also exploring initiatives such as RWA and establishing regulatory sandboxes while ensuring compliance with FATF standards. The PCC's primary task is to establish a robust and transparent regulatory framework requiring all crypto activities to comply with KYC and AML regulations.
Cryptocurrency Adoption in Pakistan
In recent years, the adoption rate of cryptocurrency in Pakistan has significantly increased, primarily driven by economic instability, currency devaluation, capital controls, and a highly digitized young population.
Bilal bin Saqib, CEO of the Pakistan Crypto Council, stated that Pakistan ranks among the top ten countries globally in cryptocurrency adoption, with an estimated 25 million active users. Pakistan is expected to take an optimistic stance on BTC mining, tokenization, and cryptocurrency regulation. Bilal bin Saqib mentioned that the country is working on blockchain technology to simplify remittance processes.
A report from Chainalysis also shows that Pakistan ranks ninth globally in cryptocurrency adoption, with India, Nigeria, and Indonesia taking the top three spots.
Additionally, Pakistan is the fifth-largest remittance-receiving country in the world (approximately $33 billion in 2024), but high fees associated with traditional channels have made crypto cross-border remittance tools quite popular.
According to BeInCrypto summary, the five most popular cryptocurrency trading platforms in Pakistan include Binance, Bitget, Bisq, OKX, and Paxful (all of which support P2P trading). Due to banks prohibiting direct cryptocurrency trading, Pakistani users typically opt for widely accepted alternative payment methods on P2P platforms, including mobile wallets and fintech solutions such as JazzCash, Easypaisa, and Redot Pay.
Conclusion: Opportunities and Challenges Coexist
Cryptocurrency has the potential to become a powerful tool for Pakistan to combat inflation and optimize cross-border payments. Furthermore, the country's young and digitally inclined demographic structure provides a natural advantage for the promotion of cryptocurrency and Web3 technologies. The establishment of the crypto council may accelerate this process through education and infrastructure development.
It is worth mentioning that Zhao Changpeng stated that his founded Web3 education platform, Giggle Academy, could provide learning opportunities for out-of-school children in Pakistan. In addition, the establishment of the Pakistan Crypto Council may promote the training of local Web3 talent through crypto and blockchain education programs, enhancing public awareness and acceptance of cryptocurrency, and potentially cultivating a group of digital economy practitioners in Pakistan.
Moreover, Zhao Changpeng's extensive experience in the crypto industry, particularly in addressing global regulatory challenges, may drive the PCC to formulate clearer regulatory policies that can attract foreign investment while balancing risks. Additionally, this move itself sends a signal to the global crypto community that the country is actively embracing Web3 and digital finance, which may attract international capital to the Pakistani market and stimulate the development of the local Web3 startup ecosystem.
However, the high proportion of the rural population in Pakistan, along with low internet penetration and financial literacy, and an outdated power grid with frequent outages, may pose obstacles to the promotion of cryptocurrency.
In summary, Pakistan's cryptocurrency adoption is at a critical turning point. The government's positive signals indicate that it may soon introduce a preliminary regulatory framework. If successful, this could unleash significant market potential, especially in remittances and financial inclusion. However, improving infrastructure and international compliance remain key challenges. Furthermore, if Pakistan successfully builds a compliant crypto ecosystem, it may influence the policies of similar economies like Bangladesh and Iran.
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