Pakistan Proposes Compliance-Focused Crypto Regulatory Framework

Pakistan’s regulators have put forward a compliance-driven framework for digital asset oversight, aiming to meet Financial Action Task Force (FATF) standards for anti-money laundering (AML) and countering terrorism financing. This marked change comes after years of anti-crypto rhetoric and highlights the country’s intention to embrace digital assets—albeit under stringent compliance.

Paradigm Shift in Pakistan’s Policy

The Federal Investigation Agency (FIA) introduced a set of rules for combating money laundering and enforcing Know Your Customer (KYC) norms, aligning digital asset regulation with FATF guidelines. According to FIA Director Sumera Azam, the proposal strikes a balance between “technological advancement and national security imperatives.”

Pending legislative approval, the framework may roll out in multiple phases starting in 2026, in consultation with digital asset companies. Pakistan’s historic shift echoes a broader regulatory pivot: once staunchly anti-crypto, the government had previously called for a nationwide ban. Now, officials appear keen to build a constructive environment for cryptocurrency, especially to attract foreign investment.

Forming the Pakistan Crypto Council

Key to this shift is the Pakistan Crypto Council, formed by the government in February 2025. The Council was tasked with crafting clear, investor-friendly crypto policies. Recent efforts focus on:

1. Regulatory Clarity – Designing rules that meet FATF demands and enable secure digital asset usage.
2. Attracting Foreign Investment – Leveraging Pakistan’s young, tech-savvy population and encouraging crypto-friendly infrastructure.
3. Exploring Crypto Mining – Investigating the potential of surplus energy usage for Bitcoin mining in an effort to transform Pakistan into an international mining hub.

The Council received a major endorsement on April 7, appointing Binance co-founder Changpeng Zhao as a crypto adviser.

Compliance as the Core Focus

Pakistan’s new crypto roadmap emphasizes:

• KYC Controls – Implementing robust customer verification and monitoring transactions for suspicious activity.
• AML/CFT Compliance – Meeting FATF directives to combat financial crimes.
• Gradual Implementation – A multi-phase approach ensures both public and private stakeholders can adapt over time.

From a legislative perspective, the framework must still pass through national bodies and gain input from existing digital asset operators. If approved, the changes could herald a more formalized, thriving crypto environment in Pakistan.

Implications for the Region

This stands in stark contrast to the country’s earlier stance. As recently as 2023, Pakistani officials aimed to outlaw crypto due to concerns over regulatory risks. The new posture suggests a willingness to regulate rather than prohibit, potentially igniting broader digital finance adoption within South Asia.

The Pakistan Crypto Regulatory Framework signals a major pivot, embedding compliance at its core to satisfy FATF obligations. By involving top industry figures and exploring crypto mining potential, Pakistan is carving a path to become a notable hub for digital assets—should the framework pass legislative hurdles and maintain investor confidence.