Islamabad, Pakistan – In a landmark move signaling Pakistan’s formal entry into the regulated digital asset space, the federal government has begun implementing its new virtual asset regulatory framework under the recently approved Virtual Assets Act, 2025. The Act, which was officially cleared by the Cabinet, Prime Minister, and President on July 9, 2025, sets the foundation for a structured, legally compliant digital asset ecosystem in the country.
A high-level meeting was held in Islamabad earlier this week with key stakeholders from the banking, exchange, and jewelry sectors to introduce and discuss the new legal framework. The objective was to brief market participants about the Virtual Assets Act and outline the licensing process for institutions seeking to engage in virtual asset-related activities.
Under this framework, the government will establish the Pakistan Virtual Asset Regulatory Authority (PVARA), a new regulatory body responsible for licensing, supervising, and monitoring all entities operating within the virtual asset ecosystem. This includes crypto exchanges, wallet providers, and any financial institution offering virtual asset services. The authority will also be responsible for ensuring that Pakistan’s digital asset market complies with international best practices, particularly the guidelines set by the Financial Action Task Force (FATF).
The meeting confirmed that banks and exchange companies will be eligible to obtain licenses to legally engage in virtual asset operations. This development opens the door for traditional financial institutions to participate in the crypto economy, offering services like crypto custody, trading, remittance facilitation, and blockchain-based settlements under a compliant structure.
Governor of the State Bank of Pakistan (SBP), Jameel Ahmed, also attended the session and shared insights on parallel initiatives from the central bank. He reaffirmed that the SBP is in the final stages of drafting legislation for a central bank digital currency (CBDC) and that a pilot launch is expected soon. The SBP’s entry into the CBDC space aims to modernize monetary systems, increase financial transparency, and reduce reliance on cash-based transactions, aligning with global trends in central banking.
The regulatory steps follow the government’s earlier announcement in February 2025 regarding the formation of the Pakistan Crypto Council—a dedicated body tasked with coordinating national policy for the adoption and regulation of virtual assets. The Council will work in tandem with PVARA to shape a secure, growth-oriented digital asset environment.
This progression reflects Pakistan’s strategic shift from a previously restrictive stance on cryptocurrencies to a more open, regulated framework that seeks to harness the potential of blockchain and digital assets while minimizing risks related to financial crime and instability. With institutions like banks and exchange companies now in line to receive formal licenses, Pakistan is positioning itself as a potential hub for regulated crypto innovation in South Asia.
The introduction of PVARA and licensing for banks and exchange firms marks a pivotal step toward institutionalizing digital assets within Pakistan’s financial system. It offers a level of certainty for investors, fintech startups, and international firms seeking to operate in the market, while establishing mechanisms to ensure accountability, consumer protection, and compliance with global financial norms.
