Pakistan has officially taken a major step into the digital financial era by enacting a comprehensive law to regulate cryptocurrencies and virtual assets. The country’s new “Virtual Assets Act, 2025” establishes a full-fledged legal and supervisory framework for crypto activities, signaling Islamabad’s intention to embrace innovation while maintaining strong regulatory and financial safeguards.
The legislation was formally approved by the Federal Cabinet, endorsed by the Prime Minister, and signed into law by the President of Pakistan. In an announcement issued by the Office of the Special Assistant to the Prime Minister and Minister of State on Blockchain and Crypto, the government highlighted this move as a milestone that would place Pakistan on the global map for digital finance.
At the core of this new legal structure is the creation of the Pakistan Virtual Asset Regulatory Authority (PVARA), an autonomous federal body tasked with licensing, regulating, and overseeing all entities engaged in the crypto and virtual asset ecosystem. PVARA will ensure compliance with anti-money laundering standards, combat illicit financial flows, and uphold financial integrity in line with global norms, including the recommendations of the Financial Action Task Force (FATF).
The Authority will be governed by a diverse board featuring senior figures from key institutions. This includes the Governor of the State Bank of Pakistan, Secretaries of Finance, Law and Justice, Information Technology and Telecommunications, and Chairpersons from the Securities and Exchange Commission of Pakistan (SECP), the Federal Board of Revenue (FBR), and the Digital Pakistan Authority. Additionally, two independent directors with specialized expertise in finance, law, or technology will be appointed. The Chairperson, chosen for their experience in regulatory, legal, or financial matters, will lead the institution’s strategic vision.
A critical element of the Act is the introduction of a mandatory licensing framework for anyone wishing to provide crypto or virtual asset services within or from Pakistan. This licensing regime sets out rigorous standards for incorporation, governance, operational risk management, customer due diligence, and detailed reporting obligations designed to protect consumers and maintain the stability of Pakistan’s financial system.
To encourage responsible fintech innovation, the law also provides for the establishment of a regulatory sandbox. This mechanism will allow startups and financial institutions to test emerging crypto products and services under controlled conditions without immediate risk of regulatory enforcement. The Authority is further empowered to issue no-action letters under specified circumstances, giving innovators a green light to explore new models with legal clarity.
Reflecting Pakistan’s commitment to aligning financial practices with Islamic principles, the Act calls for a Shariah Advisory Committee to guide the Authority on the compliance of crypto products with Islamic finance norms. Licensed providers offering Shariah-compliant services will be required to follow the rulings of this Committee, ensuring that the new digital economy also meets ethical and religious standards.
Additionally, the Virtual Assets Act establishes a dedicated Appellate Tribunal to hear challenges against PVARA’s regulatory decisions. Composed of judicial and technology experts, the Tribunal is designed to provide an independent avenue for appeals, reinforcing accountability and fair oversight.
By enacting this legislation, Pakistan is not only positioning itself to harness the opportunities of crypto finance but also setting a robust legal and ethical foundation for its growth. This balanced approach aims to attract investment, protect consumers, and build a digital economy that aligns with both international best practices and local values.
