Pakistan introduces its first-ever policy framework to regulate virtual assets, service providers

Pakistan has unveiled its first comprehensive policy framework for the regulation of virtual assets (VAs) and virtual asset service providers (VASPs), marking a major step toward responsible digital innovation and alignment with global financial standards.

The policy was developed by the National Working Group on VAs and VASPs, which was established in January 2024 by the Ministry of Finance. This working group operates under the supervision of the Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT) Authority, led by the Federal Investigation Agency (FIA). It includes senior representatives from the State Bank of Pakistan, Securities and Exchange Commission of Pakistan (SECP), Financial Monitoring Unit (FMU), Federal Board of Revenue (FBR), NACTA, Ministry of IT, and other key public and private sector stakeholders.

In a press release, an FIA spokesperson announced the policy and emphasized its significance. FIA Director Sameera Azam, a key contributor to the framework, described it as a “paradigm shift” in Pakistan’s approach to digital finance.

“We are stepping into the digital future with clarity and purpose,” she stated. “This framework represents a landmark move to balance fintech innovation with national and global security obligations. It fully aligns with FATF’s Recommendation 15, reinforcing Pakistan’s dedication to combating financial crimes and upholding international financial norms.”

The framework is designed to address risks such as money laundering, terrorist financing, and financial instability, while also encouraging the secure growth of blockchain-based financial systems.

Rather than adopting a rigid regulatory stance, the policy promotes a flexible and phased approach. It supports controlled experimentation to foster innovation, institutional learning, and the development of regulatory capacity in handling emerging financial technologies.