By Staff Reporter
ISLAMABAD: Pakistan is mulling a limited amnesty for cryptocurrency traders as part of a push to regulate the burgeoning sector, amid concerns from local banks over risks tied to more than $250 billion in annual trading by users in the South Asian nation.
The proposal emerged during a high-level meeting on Friday where officials discussed integrating virtual assets into the economy, potentially boosting gross domestic product, according to people familiar with the matter and an official statement.
“These virtual assets should be considered as part of liquid money supply (M-1) … virtual assets collateralisation will help increase M-1” because these are highly visible and dependable, a Binance team member told the gathering, which was co-chaired by Finance Minister Muhammad Aurangzeb and Pakistan Virtual Assets Regulatory Authority Chairman Bilal Bin Saqib.
The session, aimed at advancing Pakistan’s National Digital Asset Framework, drew the State Bank of Pakistan governor, heads of major commercial banks and senior executives from Binance Holdings Ltd., including Chief Executive Officer Richard Teng. Participants explored tokenising sovereign debt to improve liquidity, broaden investor participation and establish Pakistan as a leader in blockchain-based finance in the region, the statement said.
They also laid out guidelines for taxation and compliance, such as delegating oversight to licensed exchanges, implementing a phased capital-gains tax to foster stability and offering a time-bound amnesty to draw assets onto regulated platforms.
Binance representatives shared data showing about 17.5 million Pakistanis registered on the exchange, with 4 million active traders holding roughly $5 billion in virtual assets. Annual trading volume from these users hits around $250 billion on Binance alone, excluding activity on other platforms, Dawn newspaper reported, quoting sources. The exchange boasts more than 300 million active users globally, concentrated in 22 countries. “This unlocks $5bn of assets that Pakistani users are now able to invest back into economy in Pakistani rupees,” a Binance official said, noting that “banks could also make withdrawals of stablecoins.”
Binance would use application programming interfaces for automated trading to assess maximum loan liabilities to banks, “vastly reducing Pakistani users’ default rates,” the official claimed. Local banks voiced worries about security vulnerabilities and compliance, drawing on global precedents to protect stakeholders from issues like money laundering. Binance countered that it could mitigate these through its international experience, providing real-time visibility into individual users’ assets and balances, which are traceable.
With the central bank’s involvement, Pakistani lenders could gauge borrowing limits and custody recognised US dollar assets on the platform, expanding the nation’s asset pool and economic inflows. “Banks can lend confidently based on visible and verified assets,” a Binance official assured the bank representatives.
The discussion highlighted so-called SDCs, described as shadow cash, as viable collateral for credits and loans, potentially drawing billions in additional U.S. dollars via new remittance channels atop the $38 billion sent yearly by expatriates through traditional means.
Officials noted that US infrastructure funds, USAID and Treasury-linked credits could further amplify dollar inflows, helping “boost GDP and economic growth” despite hurdles.
Saqib, who recently resigned as special assistant to the prime minister on blockchain and cryptocurrency due to a conflict with his regulatory post, declined to comment. But the statement quoted him emphasising the “importance of viewing digital assets as critical financial infrastructure with significant potential to support financial inclusion, expand access to services for the unbanked and create new opportunities for banks through innovative products, expanded deposits and new customer segments.”
The meeting assessed next moves for a secure, regulated digital-asset ecosystem, focusing on on- and off-ramps, stricter compliance, transparency and ties with traditional finance. Aurangzeb affirmed Pakistan’s dedication to a progressive regulatory setup that encourages innovation while protecting economic priorities. He urged collaboration among agencies, global exchanges and banks to update payments, enhance inclusion and meet global norms.
Attendees spotlighted blockchain’s role in slashing costs from the $38 billion remittance market and stressed building domestic expertise in blockchain and Web3 to tap worldwide demand, generating jobs for young Pakistanis.
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