ISLAMABAD: The risks associated with cryptocurrencies “far outweigh” the benefits, the Pakistani central bank governor has said, weeks after a mega crypto scam hit the country and the State Bank recommended banning virtual payment systems.
Thousands of Pakistanis lost life savings in a $100 million cryptocurrency scam, Pakistan’s Federal Investigation Agency (FIA) said last month, with investigators estimating that some 37,000 people, mostly from middle-class households in Punjab’s Faisalabad, had been defrauded after investing money in a scheme which promised to multiply funds.
Speaking at the recent MASIC Annual Investment Forum in Riyadh, Pakistan central bank chief Reza Baqir said cryptocurrencies posed a risk to financial and monetary stability due to acute price fluctuations and their distributed and decentralized nature.
“In Pakistan, we as the central bank have reached the conclusion as of now that, for us and in terms of the core objectives of the central bank, the potential risks far outweigh the benefits,” Baqir said, according to a transcript of the speech released by the State Bank of Pakistan (SBP) this week.
“As many of you would be aware, we are not alone in reaching this conclusion. Many large emerging markets, including China, India, Russia, among others have reached similar conclusions.”
Virtual currencies were prone to be used for illegal economic activities and posed the risk of widening the gray economy, capital flight and consumer protection issues, the SBP governor added.
Speaking about why advanced economies had a more “permissive” attitude toward virtual currencies, the governor said: “One reason may be that in many of the advanced economies there is little practical threat that their currency, in many cases one of the major currencies of the world in which trade and finance is denominated, would be replaced by a new virtual currency.”
Another valid concern, according to him, was the impact of virtual currencies on promoting capital outflows, and more generally, capital volatility.
“Since by definition such currencies cannot be monitored, regulators are at a loss to determine the impact on the balance of payments, representing another key risk,” he added.
Pakistan’s central bank declared in 2018 that virtual currencies like Bitcoin were not legal tenders issued or guaranteed by the country’s government.
But despite not being recognized by the SBP, interest in cryptocurrencies has been on the rise. The country ranked third in the global crypto adoption index in 2020-21, after India and Vietnam. The federal chamber of commerce said in a report last year Pakistan had recorded around $20 billion in cryptocurrency value in 2020-21, showing an abnormal increase of 711 percent.
The central bank has not commented on FPPCI’s findings so far but in January recommended banning cryptocurrency, arguing that allowing it would cause capital flight. A committee formed by the Sindh High Court to deliberate on virtual currencies also urged imposing a “complete ban.”
The recommendations came as the court last year heard a constitutional petition filed in 2019, which sought to overturn the central bank’s guidance from 2018 advising banks and payment system operators against processing and investing in virtual currencies.
But proponents of cryptocurrency trade in Pakistan argue that the risks, and scams such as the one unearthed last year, are caused by the absence of a legal framework.
Waqar Zaka, a Pakistani TV host and activist who has filed a court petition in favor of allowing digital currencies, said regulation would help keep fraud at bay.
“I pleaded with the court that people have invested billions of rupees in crypto trade and the government should not declare it illegal,” he told Arab News in an interview last year. “Instead, it should devise a mechanism to legalize the business, and keep a check on transactions.”
Cryptocurrency risks ‘far outweigh’ benefits, Pakistan central bank chief says at Riyadh forum
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Cryptocurrency risks ‘far outweigh’ benefits, Pakistan central bank chief says at Riyadh forum
- Thousands of Pakistanis recently lost life savings in $100 million cryptocurrency scam
- In the wake of the scam, State Bank has recommended banning virtual currencies in Pakistan
Pakistan says defense pact with Saudi Arabia elevated brotherly ties to ‘new heights’
- Pakistan, Saudi Arabia signed strategic defense pact last year pledging aggression against one will be treated as attack on both
- Deputy PM Ishaq Dar says enduring bonds with Islamic and Arab nations form vital pillar of Pakistan’s foreign policy
ISLAMABAD: Deputy Prime Minister Ishaq Dar said on Wednesday that Pakistan’s defense pact with Saudi Arabia elevated its brotherly ties with the Kingdom to “new heights,” stressing that close ties with Arab and Islamic nations form a key pillar of Islamabad’s foreign policy.
Pakistan and Saudi Arabia signed a Strategic Mutual Defense Agreement on Sept. 17 last year, pledging that aggression against one country would be treated as an attack on both, enhancing joint deterrence and formalizing decades of military and security cooperation.
Both nations agreed in October 2025 to launch an economic cooperation framework to strengthen trade and investment ties.
“In the Middle East, our landmark Strategic Mutual Defense Agreement with Saudi Arabia has elevated our brotherly ties to new heights,” Dar said while speaking at the Pakistan Governance Forum 2026 event in Islamabad.
The Pakistani deputy prime minister was speaking on the topic “Navigating International Relations Amidst Changing Geo-Politics.”
Dar noted that Pakistan has reinforced partnerships with other Middle Eastern nations such as the UAE, Qatar, Jordan, Oman, Egypt and Bahrain. He said these partnerships have yielded “concrete agreements” in investment, agriculture, infrastructure, and energy sectors.
“Our enduring bonds with Islamic and Arab nations form a vital pillar of our foreign policy, and we will continue to expand our partnerships across Asia, Latin America, and Africa,” he said.
Dar pointed out that the presidents of Kazakhstan, Uzbekistan and Kyrgyzstan have undertaken visits to Pakistan in recent months, reflecting Central Asian nations’ desire to boost cooperation with Islamabad.
On South Asia, the Pakistani deputy PM said Pakistan has successfully transformed its fraternal ties with Bangladesh into “a substantive partnership.”
“Similarly, the trilateral mechanism involving China, Pakistan, and Bangladesh has been launched with a view to expanding and deepening regional cooperation and synergy,” the Pakistani minister said.
He said Islamabad has strengthened its “all-weather” partnership with China via the second phase of the multi-billion-dollar China-Pakistan Economic Corridor agreement and “unwavering support” from both sides for each other’s core interests.
Dar said Pakistan had also reinvigorated its partnership with the US, advancing cooperation in trade, technology, investment, and regional stability.
“This calibrated approach has enhanced our ability to navigate complexity with skill and confidence, ensuring that our national interests are served without compromising our core foreign policy principles,” he said.
