Pakistan lifts eight-year banking ban and establishes a cryptocurrency crime crackdown unit

Pakistan establishes a cryptocurrency crime investigation unit

Pakistan's Federal Bureau of Investigation (FIA) has established a specialized unit to investigate cryptocurrency-related crimes, aiming to strengthen the country's ability to crack down on financial violations involving digital assets.

Newly established cryptocurrency crime investigation unit

According to Dr. Mohammed Attar Wahid, Director of the FIA Counter-Terrorism Bureau, this newly established cryptocurrency investigation unit is affiliated with the FIA's National Command and Control Center (NC3). Its main task will be to track and combat money laundering and terrorist financing through virtual currencies.

Dr. Wahid said that although the Virtual Assets Regulation Authority of Pakistan (PVARA) is responsible for the regulation of digital assets, this department of the FIA focuses on law enforcement and criminal investigations. He called on the National Cybercrime Investigation Bureau and the Anti-Narcotics Force to also establish a similar dedicated cryptocurrency team to curb the use of virtual assets in cybercrime and drug trade. He also confirmed that relevant rules are being drafted to ensure that cryptocurrency-related investigations can be completed within the specified time limit.

Pakistan's newly established National Command and Control Center integrates all financial crime investigation tools on the same platform, including anti-money laundering, virtual currency investigation desk, Interpol collaboration, open source intelligence, cyber patrol and dark web investigation departments. The NC3 platform gathers the FIA's investigative resources and strengthens the coordination capabilities of various financial crime investigations, from traditional money laundering to cybercrime.

Regulatory path and international cooperation

Pakistan has taken a number of rapid measures to promote the formalization of the cryptocurrency industry. The government lifted the ban on cryptocurrency banks that had been in place since 2018, established PVARA, began issuing licenses to digital asset exchanges, and launched the tokenization of state-owned assets.

Developments:

Cryptocurrency banking ban: Previously effective from 2018 and cancelled in 2024.

Regulatory Authority: There was no special regulatory authority before, but PVARA has been established.

Exchange licenses: The issuance was not allowed before, but the licensing process has now started.

The country's diplomatic strategy has also incorporated digital assets. Islamabad has held talks with a U.S. cryptocurrency company (a related party to World Liberty Financial, a Trump family linked) to explore using its USD1 stablecoin for international payments.

Pakistan ranks third in the Chainalysis 2025 Global Cryptocurrency Adoption Index, reflecting the country's increasing participation in digital assets globally.

Religious controversy and market uncertainty

Despite intensified supervision and enforcement efforts, digital assets still face criticism from religious authorities. In June this year, Darur Ulum University in Karachi, an influential Islamic theological school, issued a fatwa characterizing cryptocurrencies as invalid "wealth" that does not comply with Islamic law and is not an allowed payment method. This has brought uncertainty to Pakistan's broader adoption plans.

PVARA Chairman Bilal Ben Saqib called for dialogue to distinguish speculative cryptocurrencies from regulated asset-backed products. He believes that if Pakistan implements asset-backed stablecoins and blockchain-based Islamic bonds under appropriate regulatory guarantees, the country may become a leading center of digital finance compliant with Islamic law.

Uncertainty remains in the field due to continued debate between religious circles and regulators over the legality of cryptocurrencies, and Pakistan's official position on digital assets is still under review.

With the establishment of law enforcement agencies, the Pakistan government is advancing its work from multiple aspects. However, the issue of whether cryptocurrencies conform to religious teachings remains unresolved and continues to affect the pace and direction of regulation and market development.