The Pakistan Virtual Assets Regulatory Authority (PVARA) has officially launched a regulatory sandbox for digital assets, creating a supervised environment for testing cryptocurrency products and services. The framework was confirmed on February 20, 2026, as part of the country's broader push to establish formal oversight for the crypto sector.
The sandbox will allow companies to trial products in a live but controlled setting before seeking full authorization. It is designed to support innovation in specific areas including tokenization of real-world assets, stablecoins, remittance systems, and on- and off-ramp infrastructure that converts between fiat currency and digital assets. PVARA stated that detailed guidelines and the application process for potential issuers will be published soon.
This initiative is a key component of Pakistan's roadmap to formalize its digital asset sector. The government has been exploring digital currency initiatives to reduce cash usage and aims to strengthen oversight while encouraging innovation and attracting international investment. According to Chainalysis data cited in reports, Pakistan ranked as the third-largest country globally for crypto adoption in 2025, trailing only India and the United States.
In a significant development for stablecoin infrastructure, Pakistan signed a memorandum of understanding earlier this year with SC Financial Technologies, an entity affiliated with World Liberty Financial (WLFI). WLFI is a crypto-based platform launched in September 2024 and is linked to the family of former U.S. President Donald Trump. The MoU sets the basis for cooperation on regulated stablecoin payment systems, with a focus on exploring dollar-linked stablecoins for cross-border transactions.
Pakistan's regulatory strategy has also involved high-profile industry figures. The country previously tapped Binance founder Changpeng 'CZ' Zhao as a strategic advisor to the Pakistan Crypto Council (PCC). CZ commented on the pace of progress, stating, "If we keep moving at this speed in five years, Pakistan will be one of the crypto leaders in the world."
International engagement continued this week with Bilal bin Saqib, Chairman of PVARA, attending the World Liberty Forum at Mar-a-Lago in Florida. The event, which took place on February 19, 2026, gathered financial executives from firms like Goldman Sachs, Nasdaq, Franklin Templeton, and Coinbase, along with crypto innovators and policymakers, to discuss the future of stablecoins, tokenization, and financial innovation.
The sandbox framework is intended to help regulators evaluate compliance weaknesses and risks, such as anti-money laundering (AML) gaps, before the full rollout of a comprehensive crypto regulatory framework. PVARA has already begun issuing No Objection Certificates (NOCs) as a first step toward full licensing.
