Senate committee approves draft law paving way for legal crypto trade

The Legalization of Cryptocurrency Trading in Pakistan: A New Dawn for Virtual Assets

 

In a significant development for the financial technology sector in Pakistan, a Senate committee has green-lighted a draft bill aimed at regulating virtual assets, effectively paving the way for legal cryptocurrency trading within the country. This move signals a pivotal shift in policy, indicating Pakistan's readiness to embrace the burgeoning global trend of digital currencies. The approval of the "Virtual Asset Act 2026" by the Senate's Standing Committee on Cabinet signifies the legislative backing for the Pakistan Virtual Assets Regulatory Authority's (PVARA) mandate and its authority to issue operational licenses for cryptocurrency activities.

 

Understanding the Role of PVARA

 

The Pakistan Virtual Asset Regulatory Authority (PVARA) is set to be the cornerstone of crypto regulation in the country. Under this new legal framework, PVARA is empowered to grant licenses to both issuers of cryptocurrency coins and entities involved in the lucrative process of crypto mining. The authority is vested with the crucial responsibility of supervising the entire crypto market, including the verification and regulation of companies engaged in these activities. This ensures a well-structured and controlled environment for virtual assets, potentially curbing illegal activities associated with decentralized currencies.

 

The Path to Legality

 

Senator Dr. Afnan Ullah Khan, a member of the committee, emphasized that the path to making cryptocurrency trading legal in Pakistan involves several legislative steps. Following the draft law's passage through parliamentary phases in the Senate and National Assembly, it requires presidential assent to become enforceable legislation. Dr. Afnan optimistically predicts a swift transition, suggesting that the process might conclude in a matter of weeks, thus opening the doors for Pakistani citizens to engage legally with major cryptocurrencies like Bitcoin, Ethereum, and XRP through established crypto exchanges.

 

Regulatory Framework: Addressing Concerns

 

The regulation of digital currencies often comes with its share of apprehensions, primarily concerning their potential misuse for illicit practices such as money laundering. The proposed law robustly addresses these issues with stringent provisions. It calls for the implementation of fines and penalties for violations committed by license holders, ensuring compliance and integrity within the crypto marketplace. These measures are designed to reassure stakeholders that while digital innovation is welcome, it will not compromise legal and financial security.

 

Initial Engagements and Future Prospects

 

PVARA's proactive engagement with major crypto exchanges such as HTX and Binance had set the stage for this forthcoming legislation. The issuance of No Objection Certificates (NOCs) to these platforms last year allowed them a preparatory phase under a defined regulatory oversight within Pakistan. While the NOC does not equate to a full operational license, it demonstrates the regulatory body's commitment to integrating global crypto players into the Pakistani financial ecosystem.

 

Conclusion: A Progressive Step Forward

 

The Senate committee's approval of the draft bill not only reflects a progressive approach towards financial technology innovation but also positions Pakistan as an emerging contributor to the global cryptocurrency landscape. By providing a legal framework through which digital currencies can be managed, the country aims to foster growth in the virtual assets domain while safeguarding against potential abuses. As the legislative process unfolds, stakeholders and market participants alike await the formal enactment of this transformative regulation, which promises to alter the financial fabric of Pakistan significantly.