Virtual Assets Regulatory Framework, 2025

What it is

Pakistan's first regulatory framework for virtual assets took legislative form in July 2025, when the Virtual Assets Ordinance, 2025 was promulgated. The Ordinance establishes the Pakistan Virtual Assets Regulatory Authority (PVARA) as the licensing and supervisory body for virtual asset service providers — exchanges, custodians, transfer and settlement services, and related businesses. No person may carry on virtual asset services in or from Pakistan without a licence once the regime is operative. The framework is drafted to align with FATF standards on virtual assets, and it provides for Shariah-compliance oversight of relevant products. Whether the Ordinance has since been enacted as a permanent Act of Parliament, and the current consolidated text, must be confirmed [TO BE VERIFIED BY REVIEWING LAWYER].

The framework did not arrive alone. The government established the Pakistan Crypto Council in early 2025 under the Finance Division to steer policy. Before 2025, the field was governed mainly by prohibition: the State Bank of Pakistan's 2018 circular barred regulated financial institutions from dealing in virtual currencies, leaving crypto activity in Pakistan large in practice but unbanked and unlicensed. The 2025 framework replaces that vacuum with a licensing perimeter; how the State Bank's earlier restrictions are being revised to fit it should be confirmed against current SBP directives [TO BE VERIFIED BY REVIEWING LAWYER].

What changed

The change is directional: from prohibition and legal limbo to regulated activity. As of mid-2026 the operative questions are transitional. PVARA's constitution, its licensing windows and application requirements, any transitional or no-action relief for businesses already serving Pakistani users, and its first regulations should each be confirmed against the Authority's notifications [TO BE VERIFIED BY REVIEWING LAWYER]. Two adjacent workstreams also matter. Tax treatment of virtual asset gains and the FBR's reporting expectations remained unsettled as of early 2026 [TO BE VERIFIED BY REVIEWING LAWYER]. And virtual asset service providers are expected to be brought within the anti-money-laundering net as reporting entities, with customer due diligence and suspicious transaction reporting obligations [the notification under the Anti-Money Laundering Act, 2010 TO BE VERIFIED BY REVIEWING LAWYER].

Who is affected

Crypto exchanges and platforms serving Pakistani users — onshore or offshore — face a licensing decision. Custodians, brokers, payment firms and fintechs handling virtual assets fall within the perimeter. Banks will need current SBP guidance before providing accounts or rails to licensed providers. Token issuers and businesses contemplating tokenised products need to classify their activity against the statutory definitions. Individual holders and traders are affected indirectly through tax treatment and through the migration of activity onto licensed platforms.

What to do

Map your activity against the framework's definitions of virtual assets and virtual asset services and take a written view on whether you need a licence. If you do, begin preparing now: fit-and-proper documentation for sponsors and management, an AML/CFT programme, custody and safeguarding arrangements, and audited financials. Do not launch or continue Pakistan-facing services on the assumption that the pre-2025 vacuum persists — once transition deadlines pass, unlicensed activity is a regulatory and potentially criminal exposure. Obtain advice on tax and foreign-exchange treatment before structuring, and document it.