The government has approved setting up the Pakistan Digital Assets Authority (PDAA) to regulate blockchain-based financial infrastructure, the finance ministry said on Wednesday, as the country moves to adopt a strategy to regulate and accelerate the growth of its virtual assets economy.
Pakistan set up a national crypto council (PCC) in March to create a legal framework for cryptocurrency trading in a bid to lure international investment. One of the world’s most powerful people in crypto, co-founder and former CEO of Binance Changpeng Zhao, was subsequently appointed as a strategic adviser to the PCC. Cryptocurrencies including bitcoin are not officially regulated in Pakistan but are also not illegal or banned. As of Jan. 16, 2021, the State Bank of Pakistan has not authorized any individuals or organizations to carry out the sale, purchase, exchange, and investment of virtual currencies, coins, and tokens.
Last month, Pakistan introduced its first-ever policy framework, created by a special government group under the Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) authority, to set rules for how digital money like cryptocurrencies and the companies that deal in it should operate in Pakistan. The policy has been formulated to align with compliance and financial integrity guidelines of the global Financial Action Task Force (FATF).
“The aim is to ensure FATF-compliant innovation, economic inclusion, and responsible adoption of digital assets,” the finance ministry said, announcing the approval of the Pakistan Digital Assets Authority. Pakistan is experiencing a surge in the adoption of digital assets, driven by a growing tech-savvy population and increasing government support for blockchain technology.