Pakistan finalizes strict regulations to monitor crypto transactions

ISLAMABAD: The federal government has decided to tighten oversight of cryptocurrency-related transactions.

As per details, the government has finalised the Virtual Asset Service Provider (Governance and Operations) Regulations 2025, introducing some of the strictest monitoring requirements in Pakistan’s digital finance sector.

According to official documents, verification of every virtual asset transfer exceeding Rs 1 million will now be mandatory.

Virtual Asset Service Providers (VASPs) will be required to collect and store complete details of both the sender and the receiver, ensuring full transparency in all transactions.

The regulations mandate full compliance with the FATF Travel Rule, making Pakistan one of the few countries to formally integrate the global standard into its crypto governance framework.

To enhance transparency and combat illicit financial flows, the government has decided to impose strict operational requirements on VASPs, including mandatory due diligence of overseas parties and monitoring of unhosted wallets.

Suspicious crypto transactions will be screened using advanced blockchain analytics, the documents reveal.

The new rules further specify that any major change in ownership of a VASP will require prior approval from the regulatory authority. Companies will also be required to publish all relevant legal information prominently on their official websites.

For licensing and operational security, VASPs will be required to deposit 30 percent of their paid-up capital with the State Bank of Pakistan. The regulations also approve cross-border outsourcing, allowing certain operational functions to be handled abroad.

The government has also made an annually updated cybersecurity policy mandatory for each VASP, while continuous testing and auditing of IT systems will be mandatory to ensure resilience against cyber threats, documents revealed.

The document stated that the objective of these policies is to make the virtual asset market safe, transparent, and in line with international standards.