Page 28 - CMA Journal (Jan-Feb 2026)

Focus Section

(b) Programmable Money and Smart Contract in settlement cycles and eliminated manual
Automation: Blockchain’s strategic promise extends reconciliation overheads, enabling treasurers to redirect
beyond asset forms to how money and contracts behave. efforts from operations to strategic liquidity
Smart contracts, which are self-executing agreements optimization.
encoded on a blockchain, are quickly being recognized
as the foundation of programmable money and 2) Structural Transformation of Virtual
automated exchange of value4. These constructs replace Asset Governance in Pakistan
time-lags and manual settlement processes with
(a) Fragmentation to Centralization (Pre-2025 vs.
real-time, rule-based execution among parties. For
Present): Before 2025, the digital asset market existed in
example, in corporate treasury, smart contracts can
a legal grey zone. Supervision was decentralized across
automatically process internal corporate transactions,
several institutions without a central mandate:
such as intercompany funding, supplier payments, or
dividend distributions, when specified conditions in the • State Bank of Pakistan (SBP): The main function of
ledger are met. They eliminate costly validation delays, the State Bank of Pakistan is risk containment. In
reduce settlement risk, and implement compliance logic 2018, it issued the first warning, an advisory
at the protocol level. prohibiting banking organizations from conducting
crypto transactions to protect the country's foreign
exchange system.

• Securities and Exchange Commission of Pakistan
(SECP): Deliberated on the potential of digital assets
through a position paper in 2020 and a series of
Regulatory Sandboxes, but was not granted the
legislative authority to issue full operating licenses.
• Law Enforcement (FIA/FMU): Crypto-related
activity was typically addressed either as a criminal
violation under the Prevention of Electronic Crimes
Act (PECA) or as a potential money laundering risk by
the Financial Monitoring Unit, due to the absence of
a dedicated regulator.

These disparate efforts were consolidated into a single
entity with the creation of PVARA, a separate federal
regulator. Tasked with licensing, supervising, and
regulating Virtual Asset Service Providers (VASPs), PVARA
is now the main entry point for digital asset activities in
Figure-1: Conceptualizes Programmable Money Flows
Pakistan, replacing the trust deficit of the past with a
It is more than theoretical; even financial institutions
predictable legal framework5.
using smart contracts have realized a dramatic reduction

Table 2: Comparative Regulatory Landscape

Feature Pre-2025 (Fragmented Era) Post-2025 (PVARA Era)
Primary Authority SBP, SECP, and FIA (Overlapping) PVARA (Centralized Federal Regulator)
Legal Status De Facto Restricted / Unregulated Statutory Recognition as an Asset Class

Licensing Ad-hoc (Limited Sandbox pilots) 8+ VASPs Categories (Exchanges, Custody, etc.)
AML/CFT Framework Reactionary Monitoring (FMU) FATF-Aligned proactive compliance

Systemic Goal Risk Containment & Prevention Innovation, Investment & Tokenization
Dispute Resolution General Courts / Criminal Law Dedicated Virtual Assets Appellate Tribunal

Source: Author’s Compilation
26 ICMA’s Chartered Management Accountant, Jan-Feb 2026