Pakistan parliament passes Virtual Assets Act formalizing crypto regulatory authority

Pakistan’s parliament passed the Virtual Assets Act, 2026, converting the Pakistan Virtual Assets Regulatory Authority (PVARA) into a permanent federal body with the power to license and supervise crypto service providers.

The legislation, which takes effect upon publication in the official Gazette, introduces criminal penalties for unlicensed operations, including fines of up to PKR 50 million ($179,000) and imprisonment of up to five years. Unauthorized virtual asset offerings or promotional activities will receive a separate penalty of up to PKR 25 million ($89,000) and three years imprisonment.

The law also authorizes PVARA to establish special “virtual asset zones” designed to attract blockchain companies, though specific zones have not yet been designated.

PVARA was initially constituted through a presidential ordinance in July 2025. The new law replaces that temporary measure with a statutory framework, granting the authority powers to acquire property, enter contracts, and enforce compliance. PVARA is now responsible for issuing, suspending, and revoking licenses for Virtual Asset Service Providers, which include exchanges, custodians, and firms facilitating token issuance.

“The legislation also equips the Authority with powers to address money laundering, terrorist financing, and other illicit activities associated with virtual assets, bringing Pakistan’s regulatory approach in line with international standards,” PVARA wrote in an X post on Friday.

Licensing and market entry

PVARA first invited global crypto firms to apply for licenses in September 2025, targeting an estimated 40 million local users. The regulator stipulated that applicants must already be recognized by a major jurisdiction such as the U.S., the European Union, or Singapore.

Firms must also meet minimum capital requirements and ensure their services comply with Sharia law under the guidance of a committee of Islamic finance scholars.

HTX in December 2025 became one of the first exchanges to receive a No Objection Certificate from PVARA, initiating the formal licensing process. Binance received a similar preliminary clearance that same month.

Both clearances allow the exchanges to register with Pakistan’s Financial Monitoring Unit for anti-money laundering compliance while preparing full license applications, though they are not yet permitted to operate.