Pakistan VARA gets virtual asset regulation mandate after parliament vote

Pakistan’s parliament has passed the Virtual Assets Act, 2026, which is the most comprehensive legal framework on digital assets put together in the country.

The Act also establishes the Pakistan Virtual Assets Regulatory Authority (PVARA) and gives it the mandate to license, regulate, and supervise all cryptocurrency service providers operating in the country.

PVARA stated that “the framework is designed to promote transparency, protect investors, and ensure the integrity and stability of the virtual assets market while enabling responsible innovation in financial technologies.”

PVARA Chairman Bilal Bin Saqib, who is also the CEO of the Pakistan Crypto Council, wrote on X, “A year ago, Pakistan’s digital asset landscape was defined by uncertainty and grey areas. Today, we have the country’s first Act of Parliament establishing a regulatory body for virtual assets, building on the Presidential Ordinance introduced in 2025.”

What powers does the new law give PVARA?

The newly commissioned PVARA has the power to impose penalties up to PKR 50 million (approximately $179,000) and five years’ imprisonment on exchanges, custodians, wallet operators, token issuers, lending platforms, and all others that operate without a license.

Unauthorized token offerings carry a separate penalty of up to PKR 25 million ($89,000) and three years in prison. Existing providers have six months to comply or cease operations.

According to PVARA, the legislation also equips it “with powers to address money laundering, terrorist financing, and other illicit activities associated with virtual assets, bringing Pakistan’s regulatory approach in line with international standards.”

Firms are also required to ensure that their services comply with Sharia law.

How has Pakistan prepared the ground ahead of the legislation?

In February 2026, PVARA formally launched a regulatory sandbox, a supervised environment allowing firms to test real-world use cases, including tokenization, stablecoins, remittances, and on- and off-ramp infrastructure under regulatory oversight.

In December 2025, PVARA granted No Objection Certificates (NOCs) to Binance and HTX, two of the world’s largest cryptocurrency exchanges.

In his recent post on X, Bin Saqib stated, “With NOCs already issued and banking rails being developed in coordination with the State Bank of Pakistan, we are now moving toward a comprehensive licensing framework aligned with global AML and financial integrity standards.”

Around that same period, Pakistan’s finance ministry announced that it had signed a memorandum of understanding (MOU) with Binance to explore blockchain-based tokenization of up to $2 billion in government-backed real-world assets.

What does this mean for Pakistan and its neighbors?

Pakistan has one of the highest cryptocurrency adoption rates in the world, with PVARA estimating that between 30 and 40 million Pakistanis are active in digital assets, and industry-wide assessments put annual digital asset trading activity linked to Pakistan at more than $300 billion.

However, before the legislation, there was no framework regulating the space or looking after the millions of adopters.

Bin Saqib stated that he sought to fix the ambiguity in the sector, and this act seems to do just that.

The country’s passage of crypto law may add pressure on India, which leads global adoption surveys but continues to operate without an equivalent legislative framework, to speed up its own regulatory process.