The Senate of Pakistan is set to consider the Virtual Assets Bill 2025, introduced as a private member’s bill by Senator Dr. Afnan Ullah Khan. The proposed legislation seeks to regulate the burgeoning domain of virtual assets, including cryptocurrencies and blockchain technologies, while also paving the way for the introduction of a Digital Rupee backed by the Pakistani Rupee (PKR) under central bank regulations.
Key Objectives of the Virtual Assets Bill 2025
The bill aims to:
- Regulate Issuance and Use of Virtual Assets: Establish a framework for issuing, trading, and utilizing virtual assets within Pakistan.
- Launch Digital Rupee: Introduce a legally recognized digital currency backed by PKR.
- Ensure Financial Stability: Protect investors and prevent illegal activities through comprehensive regulations.
- Establish Virtual Asset Zones: Designate regions with underutilized power resources for virtual asset activities.
Regulatory Framework and Compliance
The bill outlines stringent guidelines for:
- Registration and Licensing: Virtual currency zones, exchanges, and asset providers must comply with the new registration and licensing requirements.
- AML/CTF Measures: Adherence to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations will be mandatory, ensuring transparency and security in virtual asset transactions.
- Audits and Reporting: Regular audits and reporting mechanisms will foster trust and accountability in Pakistan’s virtual currency market.
National Virtual Assets Regulatory Commission
A National Virtual Assets Regulatory Commission will be established to:
- Oversee Virtual Assets: Manage and regulate virtual assets, ensuring efficacy and risk management.
- Licensing and Standards: Issue licenses and set standards for compliance in the virtual assets sector.
- Monitor Digital Rupee Issuance: Oversee the issuance and maintenance of the Pakistan rupee-backed digital currency.
- Enforce Compliance: Implement regulations and impose penalties for non-compliance.
Virtual Assets Zones and Tax Incentives
- Virtual Assets Zones: Specific regions will be designated for virtual asset activities, prioritizing areas with surplus renewable energy resources.
- Tax Incentives: The government will offer reduced corporate taxes for virtual assets zones and foreign investors, subject to AML/CTF compliance. Entities in these zones will benefit from tax relief for the first five years, while foreign investors contributing to blockchain projects will receive a three-year tax exemption.
Foreign Investment and Infrastructure Development
- Attracting Foreign Investment: To encourage foreign investment, the government will provide tax exemptions and allocate a portion of revenue from virtual asset operations towards local infrastructure and education in blockchain technology.
The Virtual Assets Bill 2025 represents a significant step towards integrating digital currencies and blockchain technology into Pakistan’s financial ecosystem. By providing a robust legal framework, the bill aims to foster innovation, attract investment, and ensure financial stability in the rapidly evolving virtual asset landscape.
