A New Regulatory Framework
Pakistan has moved to formalize oversight of its growing digital asset market by launching the Pakistan Virtual Assets Regulatory Authority (PVARA). Formed under the Virtual Assets Ordinance 2025, the body is inviting overseas crypto exchanges and virtual asset service providers (VASPs) to apply for operational licenses.
With more than 40 million users and an estimated $300 billion in annual trading volume, Pakistan’s crypto market has grown quickly but remained largely unregulated. Officials say the new licensing system aims to reduce illicit finance risks while providing clearer rules for fintech growth.
Focus on Trusted International Firms
PVARA has stated it will prioritize applicants already licensed by recognized regulators such as the U.S. SEC, the UK FCA, the EU VASP framework, the UAE’s VARA, or the Monetary Authority of Singapore.
Applications must include detailed company information, existing licenses, compliance track records, and operational models for the Pakistani market. Requirements also emphasize strong standards for AML, CTF, and KYC compliance.
Bilal bin Saqib, CEO of the Pakistan Crypto Council, noted that the country offers lower operational costs, access to skilled talent, and a strategic location for blockchain firms.
Sandboxes and Shariah-Compliant Products
The licensing framework introduces regulatory sandboxes, allowing innovation in new digital asset products, including those designed to comply with Shariah law. Officials said these measures will help align Pakistan’s policies with international norms set by the FATF, IMF, and World Bank.
Applications are being accepted on a rolling basis, giving firms flexibility in when to submit proposals.
Oversight and Governance
PVARA’s governing board includes leaders from the State Bank of Pakistan, the Securities and Exchange Commission, and the Federal Board of Revenue. The authority is tasked with ensuring cybersecurity resilience, consumer protection, and prevention of illicit flows.
The ordinance, effective July 8, 2025, gives PVARA broad powers to regulate and supervise VASPs across the country.
Policy and Industry Momentum
The move follows earlier steps to build infrastructure and support for the sector, including the launch of the Pakistan Crypto Council and the appointment of Binance founder Changpeng Zhao as an adviser.
Officials describe the licensing initiative as a turning point in Pakistan’s digital asset policy, one that may strengthen investor confidence and provide local users with regulated, safer market access.
