Pakistan is unable to regulate cryptocurrencies under its existing financial framework due to strict foreign exchange controls by the State Bank, though virtual assets could still act as an alternative to informal money transfer systems like hawala, according to former Federal Board of Revenue (FBR) chairman and economist Shabbar Zaidi.
Speaking at a seminar on “Adopting Digital Currency and Cryptocurrency in Pakistan: Possibilities and Concerns” hosted by the Pakistan Institute of International Affairs (PIIA) on Saturday, Zaidi highlighted both the challenges and potential of digital currencies.
He noted that while a law enabling cryptocurrency regulation has been introduced and is under parliamentary review, virtual assets remain inherently difficult to regulate. “Cryptocurrencies thrive because they leave no trail. A currency born unregulated cannot be regulated,” he remarked.
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Zaidi explained that the key difference lies in Pakistan’s tightly managed foreign exchange system, where commercial banks cannot transact in dollars without State Bank approval, unlike the more liberal regimes in the US where crypto has gained wider adoption.
He estimated that nearly nine million Pakistanis are engaged in trading or holding cryptocurrencies, particularly Bitcoin, the most prominent decentralized digital asset, which operates independently of any central bank through blockchain technology.
