Pakistan unveils first-ever policy framework for virtual assets

Pakistan has developed its first policy framework to oversee virtual assets (VAs) and virtual asset service providers (VASPs), marking a historic milestone in the country’s digital finance landscape.

The draft framework aligns with international financial standards and complies with Financial Action Task Force (FATF) Recommendation No. 15, sources at Ministry of Finance told Nukta.

It aims to promote transparency, security, and innovation in the digital financial system, specifically in regulating VAs and VASPs.

The National Working Group on VAs/VASPs, formed by the Ministry of Finance in January 2024, led the effort. The Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Authority oversees the group, with leadership provided by the Federal Investigation Agency (FIA).

Senior officials from the State Bank of Pakistan, Securities and Exchange Commission of Pakistan (SECP), Financial Monitoring Unit (FMU), Federal Board of Revenue (FBR), National Counter Terrorism Authority (NACTA), Ministry of IT, and other government and private institutions also contributed.

FIA Director Samira Azam, who played a key role in shaping the policy, said, “This draft represents a revolutionary shift in Pakistan’s approach to digital finance.”

“We are embracing the future with an open mind. This policy establishes a historic balance between growth and national security,” Azam added.

The framework, designed in accordance with FATF Recommendation No. 15, aims to mitigate risks such as money laundering, terrorist financing, and financial system instability. It also provides a pathway to harness the potential of blockchain-based financial systems.

The policy adopts a gradual, flexible, and experimental regulatory approach to encourage innovation while enhancing institutional capacity. Officials say the initiative will not only position Pakistan as a regional leader but also mark significant progress in meeting the country’s international AML/CFT commitments.

The draft will undergo stakeholder consultation, legislative review, and phased implementation before being fully enforced.