Preheat oven to 350°F (175°C). Grease and flour two 8-inch round cake pans.
In a medium bowl, whisk together the cake flour, ground pistachios, baking powder, and salt.
In a stand mixer, cream 1 cup of butter and the granulated sugar on medium-high speed until light and fluffy, about 3 to 4 minutes.
Add eggs one at a time, beating well after each addition. Incorporate the vanilla and almond extracts.
Reduce mixer speed to low. Add the dry ingredients in three parts, alternating with the milk in two parts, beginning and ending with the dry ingredients.
Divide the batter evenly between the prepared pans. Smooth the tops with a spatula.
Bake for 30 to 35 minutes, or until a wooden skewer inserted into the center comes out clean.
Allow cakes to cool in the pans for 10 minutes before transferring to wire racks to cool completely.
To make the frosting, beat the cream cheese and 0.5 cup butter until smooth. Gradually add powdered sugar and pistachio paste, beating until light and airy.
Place one cake layer on a serving plate, cover with a layer of frosting, top with the second cake layer, and frost the top and sides.