Bitcoin is more than a price chart on an overnight news cycle. For Pakistan it has become a policy question, an energy question, a tax question—and for many people, a personal money question. Over the last year Pakistan moved from official warnings and uncertainty toward creating institutions and pilot projects that signal a real policy shift. This article outlines what has changed, the possible benefits, the potential dangers, and practical takeaways for both ordinary Pakistanis and policymakers. All points are based on verifiable and recent sources.
Where Pakistan stands today — a rapid change of direction
For years the State Bank of Pakistan (SBP) warned consumers that virtual currencies were not legal tender and that banks should avoid involvement. In 2025 that posture began to change: the federal Finance Division set up a Pakistan Crypto Council (PCC) to draft rules and advise on national strategy, and the SBP issued updated material clarifying the legal status while stressing the need for a licensing framework before financial institutions participate.
In July 2025 the government promulgated a Virtual Assets Ordinance and moved to create a Pakistan Virtual Assets Regulatory Authority (PVARA) — a formal regulator to license and supervise virtual-asset service providers (VASPs). That ordinance marks the single biggest institutional step toward bringing crypto out of a legal grey area and into a supervised market.
At the same time the government — through the PCC and other officials — has discussed industrial-scale projects such as allocating surplus electricity for bitcoin mining and studying a national bitcoin reserve. These are large, headline-grabbing moves that show the state is treating crypto as part of industrial and macro strategy, not just as retail speculation.
Why some people call it an opportunity
1. A way to use surplus energy and create jobs
Pakistan periodically faces regions with surplus electricity — especially where solar generation or grid bottlenecks leave capacity unused. Officials have proposed directing some of that surplus toward energy-intensive data farms and bitcoin mining sites, which can attract investment, create skilled jobs, and generate export-like revenue in dollars if implemented with transparency. Reuters reported an initial allocation of 2,000 megawatts for mining and AI centres as part of a staged plan.
2. Potential for cheaper cross-border payments
Peer-to-peer crypto trading and stablecoin rails can lower remittance costs compared with traditional corridors — something attractive to overseas Pakistanis and households that receive money from abroad. If a lawful, regulated corridor is built (licensed P2P platforms, on/off-ramps that meet KYC/AML rules), the savings could be meaningful for families. (Implementation matters — see risks section.)
3. Financial and tech ecosystem development
A clear regulatory framework, sandboxes and licensing can attract foreign companies, spur local startups in custody, KYC/AML services, blockchain engineering, and data centres. That builds skills and exportable services — think coders, compliance operators, and hosting. The Pakistan Crypto Council has pushed that narrative while arranging partnerships and technical advice.
4. New government revenue streams (taxes, fees)
Once regulated, crypto activity becomes taxable. International lenders and domestic revenue authorities have insisted that gains be captured under tax law; that is politically useful for governments seeking revenue. The IMF and domestic tax authorities have encouraged rules that would make crypto gains visible and taxable as capital gains or business income.
Why many experts worry — the clear risks
1. Price volatility and investor losses
Bitcoin is volatile. Private savers who treat it as a guaranteed store of value can face catastrophic losses in a downturn. That’s true everywhere; in Pakistan the risk is magnified if people borrow or use leverage to chase gains.
2. Money-laundering, hawala routing and illicit use
Regulators have repeatedly warned that unregulated crypto rails can be mixed with informal value-transfer systems (hawala/hundi) to obscure flows. Law enforcement has reported criminals using crypto for ransom and other illicit payments, which underscores the need for strong AML/KYC before scaling.
3. Energy and environmental trade-offs
Large-scale mining consumes vast electricity. Even if the idea is to use surplus power, siting, grid stability, tariff structure and environmental impact must be carefully managed; otherwise mining can compete with household or industrial use or distort prices for consumers.
4. Regulatory mismatch and legal uncertainty during transition
Pakistan is in a transition: old SBP warnings, new councils, an ordinance and a regulator are all moving quickly. That can create temporary uncertainty — businesses may invest on assumptions that rules will change, or households may misread what products are legal and protected. Good regulation reduces fraud; rushed or opaque rules increase it.
What the government has actually done (quick timeline of facts)
- SBP public caution about virtual currencies (original warnings dating back to 2018).
- Creation of the Pakistan Crypto Council (PCC) in early-to-mid 2025 to draft frameworks and advise the finance ministry.
- Public plans and statements exploring mining, a national bitcoin reserve and partnerships with international crypto actors (reported in mid-2025).
- Virtual Assets Ordinance and the formation of the Pakistan Virtual Assets Regulatory Authority (PVARA) in July 2025 to license and supervise VASPs.
These are formal, documented policy steps — not just social-media claims — and they materially change the regulatory landscape.
What it means for ordinary Pakistanis (practical advice)
- Be cautious with allocations. If you’re thinking of investing money you need for rent, school fees or an emergency, treat bitcoin as highly speculative.
- Keep records for taxes. Tax authorities and the IMF have pushed Pakistan to capture crypto gains; keep transaction records and receipts. When tax rules are clarified, you’ll need them.
- Use regulated on- and off-ramps once available. Until PVARA (or other bodies) issues licenses and clear rules, prefer established platforms that offer strong KYC and custody. Avoid shady peer-to-peer offers that promise “guaranteed returns.”
- Protect your keys and avoid custodial risks. If you hold crypto yourself, learn basic custody hygiene: hardware wallets, seed-phrase safety, and never sharing keys.
- Watch the news intelligently. Policy will evolve quickly. Look for official SBP and PVARA notices rather than rumors on social feeds.
What policymakers should prioritize (short list)
- Clear licensing and supervision for exchanges, custodians and payment gateways so users have recourse and AML/KYC rules are enforceable.
- Targeted pilot programs (for CBDC and regulated corridors) before nationwide rollouts. Reuters reports the SBP is planning a CBDC pilot.
- Transparent energy policy for any mining projects: tariffs, local benefit sharing, environmental impact assessments.
- Public financial education campaigns so citizens understand risk, taxation obligations, and how to spot scams.
Signs to watch next (how you’ll know if Pakistan is locking in opportunity or falling into avoidable harm)
- PVARA issues the first set of licenses and clear rules (fees, reserve requirements, AML/KYC). That’s a positive sign.
- SBP allows regulated banks to provide limited services (custody, settlement) under clear guardrails. That would move crypto from grey to mainstream.
- Transparent contracts for mining power with environmental and local benefits spelled out — not just headlines about MW numbers.
- Concrete tax guidance from FBR that explains how gains and business income from crypto are taxed and how to report them. Expect further FBR notices.
Bottom line
Pakistan’s recent policy moves turn crypto from a taboo topic into a test case. That’s both the opportunity and the risk: with careful regulation, enforced AML/KYC, sensible tax rules and transparent use of energy resources, Pakistan could capture some economic and technological upside. Without those guardrails, rapid adoption could magnify fraud, illicit finance and consumer losses.
If you’re a reader deciding what to do: stay informed, treat bitcoin as speculative capital, keep excellent records, and be skeptical of “get-rich-quick” promises. For citizens and policymakers alike, the goal should be to turn volatility and hype into regulated channels that protect people and capture real economic benefits — not to chase headlines.