Pakistan has officially taken a decisive step into the regulated digital finance space with the enactment of the “Virtual Assets Act, 2025.” The landmark legislation, approved by the Federal Cabinet, endorsed by the Prime Minister, and signed into law by President Asif Ali Zardari, sets out to provide a robust framework for governing cryptocurrencies and other virtual assets within the country.
At the heart of this new law is the creation of the Pakistan Virtual Asset Regulatory Authority (PVARA), an autonomous federal institution empowered to license, oversee, and regulate all entities dealing in virtual assets. The Authority’s mandate includes ensuring transparency, safeguarding financial integrity, promoting compliance, and combating illicit activities such as money laundering and terrorist financing. This aligns Pakistan’s regulatory posture with global standards, notably those of the Financial Action Task Force (FATF).
The governance structure of PVARA will include a diverse board comprising key public sector stakeholders. This includes the Governor of the State Bank of Pakistan, Secretaries from the Ministries of Finance, Law and Justice, and Information Technology and Telecommunications, along with the Chairpersons of the Securities and Exchange Commission of Pakistan (SECP), the Federal Board of Revenue (FBR), and the Digital Pakistan Authority. Additionally, two independent directors with demonstrated expertise in fields such as virtual assets, finance, law, or technology will be appointed to ensure balanced oversight. The Authority will be led by a Chairperson selected for their extensive experience in regulatory affairs, finance, law, or technology.
Under the Virtual Assets Act, any person or company looking to offer virtual asset services either within Pakistan or from Pakistan will be required to obtain a license from PVARA. This licensing framework will introduce stringent requirements related to corporate structuring, operational capabilities, internal compliance systems, and regular reporting duties. The goal is to foster a secure environment where both innovation and consumer protection can flourish.
Recognizing the dynamic nature of the crypto and digital finance landscape, the Act incorporates mechanisms to facilitate responsible innovation. A dedicated regulatory sandbox will allow startups and technology firms to pilot new products and services under close supervisory oversight, enabling the Authority to encourage novel business models while maintaining regulatory safeguards. Moreover, PVARA may issue no-action relief letters under specified conditions to promote experimentation without immediate regulatory penalties, supporting a balanced approach to growth and governance.
In acknowledgment of Pakistan’s Islamic financial landscape, the Act also establishes a Shariah Advisory Committee. This body will provide specialized guidance on ensuring that virtual asset products and services comply with Islamic principles. Licensed entities intending to offer Shariah-compliant financial solutions will be obligated to adhere to the rulings issued by this Committee.
Furthermore, to uphold procedural fairness, the legislation calls for the establishment of a Virtual Assets Appellate Tribunal. This tribunal will operate independently and feature specialized benches composed of experts in law, finance, and technology, tasked with hearing appeals against the Authority’s regulatory decisions.
By enacting this comprehensive law, Pakistan positions itself at the forefront of digital financial regulation in the region. The Virtual Assets Act, 2025, underscores a vision of building a secure, transparent, and innovation-driven ecosystem that supports technological advancement while protecting public interest and aligning with international compliance norms. As this framework comes into operation, it is expected to attract both local and international players eager to participate in a well-regulated and forward-looking digital market.
