EMBERS of the Senate Standing Committee on Finance and Revenue recommended last Wednesday that all those associated with the Pakistan Virtual Asset Regulatory Authority be barred from trading in virtual assets. Their concern for integrity is commendable and certainly not misplaced, but the trouble is, how effectively could such a bar be enforced? The markets for virtual assets have always been opaque, with buyers and sellers difficult to track or trace. That is why they have been used so extensively by shady operators and those looking to move value across economic borders undetected. It is not without reason that the finance minister, who heads the Pakistan Crypto Council, still does not seem entirely accepting of the idea of rushing into the space.

Perhaps the honourable members of the committee ought to have spent more time reflecting on these facets instead of bickering over who should get credit for the PVARA bill. Indeed, PVARA is supposed to prevent such practices it is mandated to ensure transparency, compliance and prevent illicit activities such as money laundering and terrorism financing but without sufficient regulatory guidelines first being devised and implemented, rules like these will always be difficult to enforce.

And that still seems to be the albatross around the government`s neck. It has yet to come up with a comprehensive regulatory system with which to tether the crypto beast. To be clear, this was never an easy undertaking: most financial jurisdictions around the world remain extremely wary of crypto assets, and there are only a handful of countries that have ventured to embrace them. But given the fanfare around Pakistan`s `great leap` towards crypto, one had expected much more progress on this undertaking than has been visible up to this point. It should be highlighted that virtual asset markets have evolved very quickly and continue to do so. It is essential, therefore, for a country entering them formally to be very versatile in its approach. The regulatory bodies that Pakistan wishes to create must not only be ethical and capable, but also agile and able to adapt to emerging technologies, new market entrants and threats. If the authorities continue to deliberate at the pace they have so far, they will always remain behind the curve. They must decide what it is they wish to accomplish and whether it is worth the risk.