Regulating Crypto in Pakistan: New Rules, New Challenges

Date Signed: March 4, 2026
Effective Date: March 5, 2026

Overview

Pakistan has enacted the Virtual Assets Act 2026, establishing a federal authority—PVARA (Pakistan Virtual Asset Regulatory Authority)—to oversee all virtual asset activities nationwide. The law brings cryptocurrency trading, wallet services, token sales, and related businesses under a clear regulatory framework.

Key Provisions

Licensing & Oversight
PVARA issues licenses, conducts inspections, and enforces rules for all virtual asset service providers (VASPs).
First step: obtain a No Objection Certificate (NOC) before applying for a full license.
Companies must register for AML compliance, incorporate in Pakistan, and submit formal applications.
Compliance Requirements
Customer Due Diligence: strict verification, ongoing monitoring.
Record‑Keeping & Reporting: maintain logs and report suspicious activity.
Fund Segregation: customer funds must be kept separate from company accounts.
Cybersecurity: robust measures required.
Transparency: clear disclosures to users.

Penalties
Fines up to 50 million PKR.
Possible imprisonment.
Seizure of assets.

Banking Integration

On April 14, 2026, the State Bank of Pakistan confirmed PVARA as the licensing authority.
Banks may open accounts for licensed VASPs only after verifying licenses and ensuring AML/CFT compliance.
Banks must keep client money in separate accounts and cannot use those funds for virtual asset investments.

Stablecoins & Tokenized Products

PVARA announced on April 26, 2026 that any service involving stablecoins or other tokenized assets requires prior approval.
Companies can join a regulatory sandbox or request no‑action relief letters to test services under PVARA’s guidance.

Objective

The legislation aims to:

Replace the informal, risky environment that previously existed.
Bring transparency and consumer protection to the crypto market.
Ensure businesses operate within a well‑defined legal structure.

Challenges Ahead

Firms must navigate:

A rigorous licensing process.
Strict AML and cybersecurity standards.
Ongoing regulatory compliance.