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Senate Finance Committee warns proposed laws could stifle virtual currency trade and urges curbs on discretionary powers of new regulatory authority.
The Senate Standing Committee on Finance has voiced strong reservations over proposed regulations for establishing and supervising cryptocurrency exchanges in Pakistan, warning that strict conditions could make virtual currency business nearly impossible. The committee met on Tuesday at Parliament House, Islamabad, under the chairmanship of Senator Saleem Mandviwalla, where the Virtual Assets Bill 2025 was reviewed in detail.
During the meeting, Finance Secretary Imdadullah Bosal informed members that the government has proposed creating a Virtual Assets Regulatory Authority to oversee licensing, anti-money laundering compliance, and enforcement of standards. He stressed that clear educational and professional requirements must be set for the authority’s chairman to safeguard its credibility.
However, senators disagreed over these conditions. Senator Mandviwalla argued that requiring a master’s degree for the chairman was unnecessary, suggesting a bachelor’s or master’s degree should suffice. Senator Anusha Rahman countered that the chairman should hold qualifications in digital finance or a related field to ensure technical expertise.
Briefings revealed that companies, not individuals, would be allowed to operate in the virtual assets sector, and registration would be mandatory. The regulatory authority would provide initial approval, the Securities and Exchange Commission of Pakistan (SECP) would then issue the license, and finally, the authority would grant a “fit and proper” certificate. Without these steps, no company could legally conduct business in virtual assets.
It was further explained that firms seeking a license would need to submit three separate applications, and directors with a criminal conviction would be barred from obtaining approval. Officials argued that strict regulation was necessary to prevent money laundering and illicit financial activities.
Committee members, however, criticized the proposed rules as overly burdensome and anti-business. Mandviwalla warned that excessive discretion in granting approvals would erode investor confidence and damage the business climate. He said that the requirement of a no-objection certificate (NOC) would create further hurdles for entrepreneurs.
Anusha Rahman stressed that licenses should not be canceled without a court conviction against company directors. She also objected to the requirement for firms to file multiple applications, calling it unnecessarily complicated.
The committee urged the government to remove discretionary powers from the bill, noting that such authority is often misused in Pakistan. Senators cautioned that overly strict laws could drive the crypto business underground, shrinking the regulated sector and prompting capital flight.
The committee also raised concerns about State Bank policies. Rahman alleged that the State Bank governor was setting his own salary, whereas this authority should lie with the President, Prime Minister, or Finance Minister. She said allowing top officials to determine their own pay violated principles of transparency.
The panel summoned the State Bank governor to its next meeting and decided that the issue of salaries for the governor and deputy governor would be discussed in camera.
Cryptocurrency regulation has been a contentious issue in Pakistan for years. The State Bank previously directed a ban on crypto trading, but global growth in virtual assets and rising investor interest have compelled the government to consider a formal legal framework. Other countries, including Dubai, Singapore, and Malaysia, have introduced strict yet transparent regulations, enabling investment while maintaining oversight.
The Senate committee stressed that Pakistan must avoid laws that are impractical or hostile to investment, as these could push the sector underground and deprive the government of tax revenues. Instead, it urged a balanced framework that ensures transparency while keeping compliance manageable for businesses.
A final decision on the Virtual Assets Bill 2025 is expected in upcoming sessions, but the debate highlights the challenges Pakistan faces in balancing investor confidence with regulatory oversight in the cryptocurrency sector.
