In a groundbreaking move, Pakistan is poised to legalize Bitcoin and other cryptocurrencies as part of a strategic initiative to bolster its economy and attract foreign investment. This development, announced on March 20, 2025, marks a significant shift in the country’s approach to digital assets, positioning it as a potential leader in blockchain-powered finance within South Asia. Spearheading this effort is Bilal bin Saqib, the Chief Executive Officer of the Pakistan Crypto Council, who has outlined an ambitious vision to integrate cryptocurrencies into the nation’s financial ecosystem.

A New Era for Pakistan’s Digital Economy

Pakistan’s decision to embrace cryptocurrency comes after years of regulatory uncertainty. Historically, the State Bank of Pakistan (SBP) and other authorities expressed skepticism about digital currencies, citing risks such as volatility, money laundering, and the lack of legal safeguards. In 2018, the SBP even urged banks and payment providers to refrain from engaging with cryptocurrencies. However, the global landscape has evolved, and Pakistan is now ready to pivot toward a more progressive stance.

Bilal bin Saqib, recently appointed as Chief Advisor to the Finance Minister for digital asset management, emphasized the need for change in an interview with Bloomberg TV. “Pakistan is done sitting on the sidelines,” he declared. “We want to attract international investment because Pakistan is a low-cost, high-growth market with 60% of the population under 30. We have a Web3-native workforce ready to build.” This youthful, tech-savvy demographic—combined with Pakistan’s ranking as the ninth-highest country in global crypto adoption according to Chainalysis—provides a strong foundation for this ambitious leap.

The government’s plan involves crafting a comprehensive legal framework to regulate cryptocurrency trading and usage. This framework aims to balance innovation with security, addressing concerns like anti-money laundering (AML) and counter-terrorism financing (CTF) while fostering a pro-business environment. The newly established Pakistan Crypto Council, under the leadership of Finance Minister Muhammad Aurangzeb and in collaboration with the SBP and the Securities and Exchange Commission of Pakistan (SECP), will oversee the implementation of these regulations.

Why Legalize Crypto Now?

Pakistan’s shift toward legalization is influenced by both domestic and international factors. Domestically, the country already boasts an estimated 15 to 20 million crypto users—roughly 8% of its population—making it one of the largest crypto markets in the region. Billions of dollars in crypto transactions are already flowing through Pakistan, and formalizing this activity could unlock significant economic potential. By providing regulatory clarity, the government hopes to channel this activity into a structured ecosystem that benefits businesses, investors, and the national economy.

Globally, the push for cryptocurrency adoption has gained momentum, with the United States setting a notable precedent under President Donald Trump’s administration. Trump’s pro-crypto policies, including the creation of a Bitcoin reserve and a White House Crypto Advisory Team, have signaled a shift in how major economies view digital assets. Saqib acknowledged this influence, stating, “Trump is making crypto a national priority, and every country, including Pakistan, will have to follow suit or risk being left behind.” This global trend has encouraged Pakistan to act decisively, aiming to compete with established blockchain hubs like Dubai, Singapore, and Hong Kong.

Economic Benefits and Regional Leadership

Legalizing cryptocurrency could yield substantial economic benefits for Pakistan. By attracting foreign investment, the country hopes to stimulate growth in its fintech sector, create jobs, and position itself as a cost-effective destination for crypto businesses. Saqib highlighted Pakistan’s low operating costs and high-growth potential, noting that regulatory sandboxes—controlled environments for crypto startups to operate compliantly—could fast-track innovation.

If successful, Pakistan would become the first South Asian nation to fully legalize cryptocurrency, outpacing neighbors like India, which has maintained an ambiguous stance on digital assets, and Bhutan, which engages in Bitcoin mining but does not recognize it as legal tender. This pioneering move could establish Pakistan as the crypto capital of South Asia, drawing parallels to the economic boosts seen in other regions following regulatory clarity.

Challenges and the Road Ahead

While the prospects are promising, challenges remain. The government must navigate concerns from international bodies like the Financial Action Task Force (FATF), which previously placed Pakistan on its “gray list” for deficiencies in combating financial crimes. A robust regulatory framework will need to address these risks to ensure compliance with global standards. Additionally, public education and infrastructure development will be critical to sustaining widespread adoption.

Despite these hurdles, Pakistan’s leadership is optimistic. The Pakistan Crypto Council is tasked with aligning regulations with international best practices, promoting responsible innovation, and integrating blockchain technology into public sector operations. Saqib also hinted at exploring artificial intelligence to enhance government efficiency, signaling a broader vision for a tech-driven future.

Conclusion

Pakistan’s move to legalize Bitcoin and cryptocurrency with a new framework is a bold step toward embracing the digital age. By leveraging its young population, existing crypto user base, and strategic regulatory approach, the country aims to attract foreign investment and cement its place in the global digital economy. As the world watches this transformation unfold, Pakistan could set a powerful example for other nations navigating the complex yet promising world of cryptocurrencies. With the right execution, this initiative may well herald a new chapter of economic prosperity and technological leadership for the nation.