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- Pakistan is advancing Bitcoin legalization through a phased regulatory framework targeting exchanges custody and mining

- Chainalysis ranks Pakistan third globally in crypto adoption highlighting large existing usage

- Excess energy and onchain monitoring are central to Pakistan's regulated crypto expansion strategy

Pakistan is moving closer to formally legalizing Bitcoin (CRYPTO: $BTC ) as policymakers outline a regulatory framework aimed at integrating digital assets into the country's financial system. The effort comes as new data from Chainalysis places Pakistan third in global crypto adoption in 2025, behind only India and the United States. Government officials say the initiative is intended to bring existing crypto activity under regulatory oversight while expanding financial access across a population of roughly 240 million.

Speaking at the Bitcoin MENA Conference 2025, Bilal Bin Saqib, Pakistan's Minister of Blockchain and Crypto, said the government is accelerating the rollout of the Pakistan Virtual Assets Regulatory Framework. The proposed structure is intended to formalize a large crypto market that currently operates outside the regulated financial sector.

According to Saqib, the framework will establish a dedicated regulatory authority and introduce phased oversight of the crypto industry. Initial measures are expected to focus on licensing major crypto exchanges and custody platforms before expanding into additional segments of the market.

Financial Access Drives Policy Direction

Officials say financial inclusion is a central factor behind the policy push. Saqib stated that more than 100 million people in Pakistan remain unbanked, while approximately 70% of the population is under the age of 30. In that context, Bitcoin and other digital assets are being positioned as payment and settlement infrastructure rather than short-term trading instruments.

The government has also linked crypto legalization to cross-border income opportunities. Saqib said digital assets could support Pakistan's large freelance workforce by enabling participation in global markets without relying on traditional banking rails.

Adoption Data Supports Expansion Plans

Chainalysis' 2025 Global Crypto Adoption Index ranked Pakistan third worldwide, highlighting the scale of existing usage despite the absence of a comprehensive regulatory regime. Saqib said this level of adoption gives Pakistan the possibility to expand digital asset usage at a scale far larger than earlier adopters such as El Salvador.

To support this growth, the government has begun pilot programs, including regulatory sandboxes for crypto mining. These initiatives aim to test compliance models while attracting potential investment.

Pakistan's excess electricity capacity is also part of the government's digital asset strategy. Saqib cited estimates suggesting the country has more than 20 gigawatts of unused power. Officials say this surplus could support regulated crypto mining and artificial intelligence infrastructure, sectors viewed as potential export industries.

Phased Oversight and Onchain Monitoring

Looking ahead, Saqib said Pakistan plans to implement regulatory clarity in stages. After exchanges and custody providers, future phases are expected to cover mining operations, tokenization activities, and blockchain-based settlement systems. Authorities also plan to rely on real-time onchain monitoring tools to oversee market activity.

Government officials aim to align regulations with market speed while maintaining oversight as Pakistan integrates Bitcoin into its formal financial framework.