Digital assets authority formed to regulate Pakistan’s $25 billion informal crypto market

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The establishment of the Pakistan Digital Assets Authority (PDAA) represents a daring move by the Pakistani government to restructure its digital financial environment. The country’s growing virtual asset ecosystem, which is estimated to be worth over $25 billion informally, will be supervised by this new regulatory organisation.

Comprehensive Oversight of Digital Assets:

The PDAA is designed to regulate a wide range of digital asset platforms, including cryptocurrency exchanges, custodial wallet providers, tokenized asset platforms, stablecoins, and decentralized finance (DeFi) applications. By doing so, it aims to bring much-needed transparency and trust to a sector that has, until now, largely operated in a regulatory gray zone.

Ensuring Global Compliance:

A major focus of the PDAA will be to align Pakistan’s regulatory framework with international standards set by the Financial Action Task Force (FATF). This includes stringent measures to prevent money laundering and terrorism financing, thereby fostering a safe, compliant environment that can attract global investors and foster innovation in digital finance.

Unlocking Economic Opportunities:

Beyond regulation, the PDAA is expected to play a pivotal role in unlocking new financing channels. For instance, the authority may facilitate the tokenization of national assets and government debt, an initiative that could create innovative export channels and open up fresh investment opportunities. Additionally, by legalizing and regulating Bitcoin mining, the PDAA could help harness Pakistan’s surplus electricity, creating a new revenue stream for the nation.

Read more: Trump-backed World Liberty and Pakistan Crypto Council team up to boost blockchain and DeFi

Fostering Innovation and Inclusion:

The PDAA is not just about strict oversight; it is also geared toward empowering a new generation of technology-driven startups. By setting clear legal parameters, the authority aims to support blockchain innovators and promote economic inclusion, potentially transforming Pakistan into a regional hub for Web3 and digital finance innovation.

Strategic Implications:

This move positions Pakistan alongside leading global digital finance hubs such as the UAE, Japan, Singapore, and Hong Kong all jurisdictions that have already established specialized regulators to manage the rapid evolution of the crypto space. By taking proactive steps, Pakistan is not merely catching up with global trends but is striving to lead in the digital asset arena.

Moreover, with a clear regulatory framework in place, local investors, entrepreneurs, and international partners can operate with greater certainty, thereby fostering an environment that encourages both innovation and consumer protection.

The launch of the PDAA signals a transformative moment for Pakistan’s fintech ecosystem. As digital currencies and tokenized assets become more mainstream, the new authority will likely:

• Enhance investor protection and market integrity.

• Reduce the risks associated with an otherwise opaque market.

• Catalyze further innovation in financial services by paving the way for a regulated, thriving digital economy.