Pakistan Crypto Regulation Challenges: Ex-FBR Chief Warns Against Hawala Alternative
Pakistan cannot regulate cryptocurrencies within its current financial system due to tight State Bank foreign exchange controls, but digital assets may still serve as hawala alternatives, warned former Federal Board of Revenue chairman Shabbar Zaidi.
Key Points from the Expert Warning:
- Regulation Challenges: Pakistan faces major hurdles in controlling digital currencies due to strict foreign exchange rules
- Hawala Competition: Cryptocurrencies could rival traditional hawala systems for money transfers
- Design Issues: Digital currencies leave no transaction trail, making regulation nearly impossible
- Legal Framework: Despite parliamentary discussions on crypto laws, enforcement remains problematic
Why Pakistan Struggles with Crypto Control
The expert explained that virtual assets may still serve as an alternative to hawala even with current restrictions. Pakistan’s commercial banks cannot buy or sell US dollars without State Bank approval, making crypto integration extremely difficult.
Global Comparison
Zaidi highlighted how the United States witnesses widespread digital currency adoption due to its liberal foreign exchange system. Pakistan’s restrictive banking environment creates different challenges for crypto regulation.
Current Market Reality
Pakistan launches bold crypto reforms in 2025 with new tax rules, legal bodies, and mining strategy, signaling a digital finance revolution. However, the gap between policy and practice remains significant.
Expert Analysis
The former FBR chairman stated that cryptocurrencies flourish because they operate without oversight. A currency born unregulated faces major challenges when governments attempt control measures.
Banking Sector Impact
Pakistan’s banking system operates under strict State Bank guidelines. This creates barriers for crypto adoption compared to countries with open financial markets.
Future Implications
The warning suggests Pakistan needs better strategies to handle crypto growth. Without proper regulation, digital assets could replace traditional money transfer systems like hawala.
