Pakistan May Moves Toward Crypto Regulation as Officials Eye Higher Remittance Inflows

Pakistan is moving closer to formalizing its cryptocurrency sector as regulators and industry stakeholders discuss a potential licensing framework aimed at improving financial transparency and boosting remittance inflows.

The concept of regulated crypto licensing has been discussed between the Pakistan Crypto Council (PCC), Exchange Companies Association of Pakistan (ECAP) and upper tiers of financial stakeholders, where it is proposed to have the digital asset activity regulated into a formal framework.

Throughout the meeting, the leadership of ECAP emphasized that the inflows of remittances that are sent back to Pakistan, which are roughly estimated to about 38billion per year, may be boosted in case digital payment channels are made more efficient and regulated.

According to the officials and industry representatives, a significant proportion of Pakistanis are already making cryptocurrency transactions via informal channels. In discussions, estimates show that millions of users engage in crypto-related activity outside of regulated financial systems, and tend to experience increased transaction costs.

The stakeholders claimed that the implementation of a controlled system would facilitate the reduction of transaction costs and enhance the speed of transfers of overseas Pakistanis sending funds back home, as well as enhance the financial system transparency.

The discussions are also part of larger initiatives by financial regulators, such as the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) to consider structured regulation of digital assets. Nevertheless, there is no officially established licensing system or legal framework established.

Players in the industry believe that official regulation may help bring digital assets into the financial ecosystem in Pakistan in a regulated way, which can enhance efficiency in remittance services and decrease the use of informal transfer networks.

As consultations continue, the future of cryptocurrency regulation in Pakistan remains under review, with policymakers weighing both the risks and economic opportunities associated with digital assets.

Syeda Qandeel Zehra

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