Pakistan finds itself navigating a complex landscape regarding cryptocurrencies as regulatory developments gain momentum while the country’s State Bank (SBP) remains steadfast in its 2018 ban on crypto trading. The SBP has declared digital assets ineligible for legal tender status, citing protection of the economy as their rationale. However, recent signs indicate Pakistan’s government is embracing a more open approach to cryptocurrencies, evidenced by the formation of the Pakistan Crypto Council in March 2025, led by the finance minister. This initiative signals a shift towards utilizing digital currencies within the national economy. Moreover, the creation of the Pakistan Virtual Assets Regulatory Authority (PVARA) reflects the government’s proactive approach to regulating cryptocurrencies, aiming for a balance between innovation and consumer protection while safeguarding economic stability. 6. The SBP is actively developing a Central Bank Digital Currency (CBDC), mirroring similar initiatives by central banks globally as they explore the potential of digital fiat money. With a large segment of Pakistan’s population already engaging in crypto trading and investment, regulatory adjustments are crucial to aligning with market realities. The focus must now shift towards creating a more balanced ecosystem that fosters innovation while mitigating the inherent risks associated with cryptocurrency.