Pakistan has formally established a comprehensive regulatory framework for cryptocurrencies with the passage of the Virtual Assets Act 2026. The law, signed by President Asif Ali Zardari, transforms the Pakistan Virtual Assets Regulatory Authority (PVARA) from a temporary body created by a July 2025 ordinance into a permanent federal authority. The Senate approved the bill on February 27, followed by the National Assembly on March 3, with the act becoming effective upon publication in the official Gazette.
The legislation grants PVARA sweeping powers to license, supervise, and enforce regulations across the digital asset sector. This includes authority over exchanges, custodians, and token issuers. The act introduces strict penalties for unlicensed operations, including fines of up to PKR 50 million and prison sentences of up to five years. Separate penalties of up to PKR 25 million and three years in prison target illegal marketing and fundraising activities.
Global exchanges Binance and HTX have already taken preliminary steps under the new regime, having received No Objection Certificates (NOCs) from PVARA in December 2025. These allow them to begin the registration process with Pakistan's Financial Monitoring Unit for anti-money laundering compliance and to establish local subsidiaries, though they are not yet authorized to operate. The licensing framework requires applicants to already be recognized in major jurisdictions like the U.S., EU, or Singapore, meet capital requirements, and comply with Islamic finance principles as reviewed by a Sharia advisory committee.
The regulatory move is part of a broader national crypto strategy. The government has announced plans for a strategic Bitcoin reserve and has allocated approximately 2,000 megawatts of surplus electricity for cryptocurrency mining and AI data centers. Furthermore, Pakistan signed a memorandum of understanding with SC Financial Technologies, an affiliate of World Liberty Financial, to explore the use of the USD1 stablecoin for cross-border payments and digital finance infrastructure. PVARA Chairman Bilal Bin Saqib stated the authority is moving toward a "comprehensive licensing framework aligned with global AML and financial integrity standards," positioning blockchain as critical infrastructure for a "new financial rail for the global south."
