Key Takeaways
- Pakistan has passed the Virtual Assets Act 2026 to formally regulate crypto.
- The new law creates PVARA to license exchanges and curb illegal activity.
- The move marks a major shift from earlier crypto bans toward regulated growth.
After years of bans, warnings, and legal gray zones, Pakistan has officially embraced crypto regulation.
Parliament has passed the Virtual Assets Act 2026, turning a temporary ordinance into permanent law and creating a national regulator to oversee exchanges, wallet providers, and other crypto businesses.
The move marks one of the most dramatic policy reversals in the country’s financial history.
Pakistan Passes Its First National Crypto Law
Virtual Assets Act 2026 brings much-needed legitimacy to one of the world’s largest informal crypto markets.
It establishes a clear regulatory framework for cryptocurrencies, blockchain assets, and virtual asset service providers (VASPs).
At its core, the law defines virtual assets broadly as digital representations of value—including Bitcoin (BTC), Ethereum (ETH), stablecoins, NFTs, and tokenized securities—that can be traded, transferred, or used for payments and investment on blockchain or distributed ledger technology.
Pakistan’s crypto ecosystem had long operated in a legal gray zone.
This is despite an estimated 25–40 million users and billions of dollars in annual transaction volume.
The new law designates the Pakistan Virtual Assets Regulatory Authority (PVARA) as an autonomous regulator.
It introduces strict licensing requirements, enforces global anti-money laundering (AML) and counter-terrorism financing (CFT) standards, and imposes significant penalties for violations.
PVARA and Its Powers
PVARA, now a permanent autonomous body, gains broad authority to:
- Issue, suspend, or revoke licenses for crypto exchanges, custodians, wallet providers, token issuers, and other VASPs operating in or targeting Pakistan.
- Set standards for investor protection, risk management, cybersecurity, operational resilience, and conduct-of-business rules.
- Enforce AML/CFT compliance in line with the Anti-Money Laundering Act 2010 and FATF recommendations, coordinating with the State Bank of Pakistan (SBP), the Securities & Exchange Commission of Pakistan (SECP), and the Financial Monitoring Unit.
- Conduct market surveillance, prevent manipulation and insider trading, and advise the government on emerging areas such as tokenization, stablecoins, and blockchain innovation.
- Levy fees, impose administrative sanctions, and maintain a dedicated regulatory fund.
For investors, traders, exchanges, and fintech innovators, the framework provides greater protection, transparency, and clearer pathways for legitimate growth.
The Act also aligns Pakistan with international regulatory standards while supporting broader economic goals such as formalizing remittances, attracting foreign investment, and exploring blockchain for tokenization and cross-border payments.
It also fulfills a key reform under the country’s International Monetary Fund (IMF) program.
Pakistan’s Crypto Progress
Pakistan’s path toward regulated crypto has accelerated dramatically since 2024.
Just two years ago, the sector operated largely in the shadows despite widespread grassroots adoption driven by high inflation, currency devaluation, and the need for efficient cross-border payments.
The turning point came in March 2025 with the launch of the Pakistan Crypto Council under the Finance Ministry.
Led by CEO Bilal Bin Saqib and advised by Binance founder Changpeng Zhao (CZ), the council coordinated policy across the SBP, SECP, and other government bodies.
By July 2025, the government issued the Virtual Assets Ordinance, establishing PVARA on a temporary basis and laying the groundwork for licensing.
Key developments followed quickly:
- Plans to allocate surplus electricity for Bitcoin mining and AI data centers, including a proposed Strategic Bitcoin Reserve.
- No-objection certificates issued to major global exchanges.
- Exploration of tokenizing up to $2 billion in government assets and testing dollar-linked stablecoins for remittances.
- Preparations for a central bank digital currency (CBDC) pilot.
By late 2025, Pakistan had shifted from skepticism toward proactive engagement.
Crypto transaction volumes reportedly reached tens of billions of dollars, with the country ranking among the world’s leading adoption markets.
The passage of the Virtual Assets Act 2026 now cements that momentum, transforming temporary measures into permanent law.
From Blanket Ban to a Regulated Future
Pakistan was not always supportive of crypto.
In fact, it was once among the few countries—alongside China—to impose a sweeping ban.
In 2018, the State Bank of Pakistan issued a circular barring banks and payment providers from dealing in virtual currencies.
This effectively created a de facto ban on institutional support.
The SECP followed in 2020 with similar warnings.
By 2022, a high court committee and the Federal Investigation Agency had pushed for an outright prohibition, citing AML and terrorism-financing concerns.
As recently as 2023, the Finance Ministry stated that crypto would “never be legalized.”
That approach led to a thriving underground market while exposing users to scams, capital flight, and limited legal recourse.
With banks refusing services, much activity shifted to unregulated peer-to-peer platforms.
The new framework represents a complete reversal.
Instead of prohibition, Pakistan now views regulation as a tool for economic inclusion and growth.
Licensed operations replace gray-market risks, while innovation in mining, tokenization, and stablecoins can develop under regulatory oversight.
The shift—from blanket restrictions to a sophisticated regulatory regime under PVARA in less than two years—marks one of the most dramatic crypto policy pivots among emerging markets.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
