Pakistan now has 40m crypto-linked accounts, Senate panel told

• PVARA estimates Pakistan’s virtual-asset market at $250 billion.
• Bilal Saqib attributes crypto growth to Pakistan’s young population.
• Most crypto users in Pakistan are below the age of 40: Bilal.

ISLAMABAD: Around 40 million Pakistanis now hold cryptocurrency-linked accounts, Pakistan Virtual Assets Regulatory Authority (PVARA) Chairman Bilal Bin Saqib told the Senate Standing Committee on Cabinet Secretariat.

Saqib attributed the rapid growth of cryptocurrency use in Pakistan to the country’s young population, saying Pakistan has become the world’s third-largest crypto market, The News reported on Tuesday.

Briefing the committee, chaired by Senator Rana Mahmoodul Hassan, Saqib said the State Bank of Pakistan’s eight-year restriction on digital assets had frozen the country’s ability to adapt to the technology. Pakistan, he said, was not trying to promote cryptocurrency but to regulate an activity that had already gained significant traction among young people, noting that the UAE, Hong Kong and Thailand were pursuing similar initiatives.

The committee took up a wide agenda at the meeting, including taxation on digital devices, 5G readiness, virtual-asset regulation, illegal migration, Islamabad Club membership, declaration of foreign citizenship by civil servants, and proposed rules on the use of social media by government employees.

The Senate Standing Committee on Cabinet Secretariat was informed that the PVARA had established its virtual-asset regulatory regime within five months, describing it as one of the fastest such frameworks in the world.

Saqib estimated the size of Pakistan’s virtual-asset market at $250 billion, with $10 billion to $20 billion of Pakistani money invested in the sector, and said the majority of users were below the age of 40.

He said around 40 million Pakistanis had crypto-linked accounts, making Pakistan the world’s third-largest crypto market, and argued that the State Bank’s long-standing restrictions had hindered the adoption of the technology.

He noted that while India had imposed a 30% tax on virtual assets, Pakistan was assessing the appropriate rate, warning that excessive taxation could drive investors and businesses offshore.

He said the Government was regulating the activity already widely used by young people. Saqib said virtual-asset activity was expanding globally, with UAE, Hong Kong and Thailand pursuing regulatory frameworks.

According to the PVARA chairman, two international virtual-asset companies had been issued no-objection certificates who have been given until September 5 to complete registration, after which restrictions and enforcement action would begin against the unregistered operators. 

The cabinet secretary said cryptocurrency-related businesses would not be permitted to operate without licences. Saqib said virtual-asset activity could benefit Pakistan through remittances and foreign exchange.

Pakistan currently receives $41 billion in remittances, and reducing transaction costs could bring an additional $2 billion in foreign exchange. The Authority was working with the State Bank of Pakistan to identify more cost-effective channels and to bring activity currently taking place in the grey market into the regulated system.

The Senate committee also sought clarity on religious concerns over cryptocurrency. Senator Saadia Abbasi referred to statements by Mufti Muhammad Taqi Usmani who had declared cryptocurrency ‘to be haram’. Saqib said he conveyed the perspective of the regulatory authority with Mufti Usmani. In response to a question about whether the scholar would issue a statement, he said a joint statement would soon be issued in this regard.

The Committee called for lower taxes on digital devices, with Senators Mohammad Abdul Qadir and Saadia Abbasi warning that high taxation was burdening citizens and businesses. Chairman Rana Mahmood-ul-Hassan urged complete tax exemption for tablets and lower taxes on mobile phones, cautioning that high taxation could hinder Pakistan’s 5G rollout. 

Senator Dilawar Khan said taxes on lower-cost mobile phones should be reduced, arguing that wider use of such devices could ultimately generate higher revenue for the Government. Responding to concerns, the PTA Chairman said locally manufactured devices generally did not currently support 5G. Local manufacturers were therefore being encouraged to assemble 5G-enabled phones in Pakistan. 

The PTA Chairman informed the Committee that 37 companies were currently assembling mobile phones and they were not subject to the same tax treatment as imported devices. He said 92% mobile phones did not carry tax, while only 8 per cent were subject to it. According to the PTA Chairman, 31 million mobile phones had been manufactured in Pakistan. The PTA Member (Policy) informed the Committee that 95 per cent of the population was using locally manufactured phones.

Rana Mahmoodul Hassan raised concerns that offices linked to the Foreign Office were charging excessive fees for document verification — a service he said had effectively become a business, with people allegedly charged hundreds of thousands of rupees

Islamabad Club officials told the committee that membership costs Rs2 million for parliamentarians and government officials and Rs10 million for others, with membership capped at around 10,000. The FY2024-25 audit remains incomplete, prompting concern from the committee, which directed its prompt completion and deferred the agenda item pending an update.

The Establishment Division briefed the committee on rules requiring civil servants to declare any foreign citizenship within 30 days. Non-compliance could result in disciplinary action, while foreign-born recruits must disclose their place of birth and officials acquiring citizenship during overseas postings must relinquish it on return. Chairman Rana Mahmood stressed strict compliance with the requirements.

The committee was also briefed on proposed rules governing civil servants’ use of social media, including plans for a monitoring cell. While legitimate private use would be allowed, employees would be barred from using platforms such as TikTok and YouTube for self-promotion in their official capacity. Officials cited isolated exemptions as evidence of the need for clearer rules.