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Pakistan Opens Draft Virtual Asset Regulations for Public Consultation
Pakistan’s newly formed Virtual Assets Regulatory Authority (PVARA) has released a draft of the Virtual Asset Services Regulations 2026, inviting feedback from the public, industry bodies and other stakeholders. The draft, published on 15 June 2026, marks the first step toward a comprehensive licensing regime for virtual asset service providers (VASPs) operating in the country.
Under the draft, every VASP must obtain a license from PVARA before offering services in Pakistan. Existing firms are given a six‑month period to bring their operations into compliance. The regulations outline ten distinct licensing categories, covering exchanges, custody providers, brokers, lending platforms, asset managers, token issuers and other virtual asset services. Foreign exchanges that target Pakistani users may also be required to secure local authorization, extending PVARA’s reach beyond domestic operators.
The proposed rules impose a range of safeguards designed to protect customers and uphold the integrity of the financial system. Firms will need to demonstrate robust anti‑money‑laundering (AML) and know‑your‑customer (KYC) procedures, maintain adequate cybersecurity measures, and establish governance structures that support effective risk management. Capital and liquidity requirements are also included, with stablecoin issuers required to hold 100 % reserve backing and to keep customer assets segregated from company funds.
PVARA was created under the Virtual Assets Ordinance of 2025, an effort by the Pakistani government to bring the rapidly growing digital‑asset sector under a regulatory umbrella. Bilal Bin Saqib, a British‑Pakistani businessman who has served as chairman of PVARA and CEO of the Pakistan Crypto Council since 2025, has overseen the development of the draft.
The regulatory framework aligns with international standards set by the Financial Action Task Force (FATF) and reflects a broader trend in the region toward formal oversight rather than outright bans. By requiring licensing and compliance, Pakistan aims to reduce illicit use of virtual assets while encouraging legitimate innovation.
Industry observers note that the draft’s emphasis on customer protection and reserve backing for stablecoins could influence how local exchanges and issuers structure their operations. The requirement that stablecoins maintain full reserves is similar to the reserve‑backing rules adopted by some jurisdictions in the European Union.
The consultation period is open to all stakeholders until 30 June 2026, giving firms and investors time to review the draft and submit comments. PVARA has stated that it will consider all feedback before finalizing the regulations.
The move is part of Pakistan’s broader strategy to integrate digital assets into its financial system. The country’s large unbanked population and growing interest in cryptocurrencies make a regulated environment attractive to both local and international service providers.
As of now, the draft has not yet been finalized, and no definitive timeline for the implementation of the licensing regime has been announced. Firms operating in Pakistan should monitor PVARA’s updates closely and prepare to meet the forthcoming compliance requirements.
The draft regulations represent a significant development in Pakistan’s approach to virtual assets, signalling a shift from a restrictive stance toward a structured regulatory framework that balances innovation with consumer protection.
Under the draft, every VASP must obtain a license from PVARA before offering services in Pakistan. Existing firms are given a six‑month period to bring their operations into compliance. The regulations outline ten distinct licensing categories, covering exchanges, custody providers, brokers, lending platforms, asset managers, token issuers and other virtual asset services. Foreign exchanges that target Pakistani users may also be required to secure local authorization, extending PVARA’s reach beyond domestic operators.
The proposed rules impose a range of safeguards designed to protect customers and uphold the integrity of the financial system. Firms will need to demonstrate robust anti‑money‑laundering (AML) and know‑your‑customer (KYC) procedures, maintain adequate cybersecurity measures, and establish governance structures that support effective risk management. Capital and liquidity requirements are also included, with stablecoin issuers required to hold 100 % reserve backing and to keep customer assets segregated from company funds.
PVARA was created under the Virtual Assets Ordinance of 2025, an effort by the Pakistani government to bring the rapidly growing digital‑asset sector under a regulatory umbrella. Bilal Bin Saqib, a British‑Pakistani businessman who has served as chairman of PVARA and CEO of the Pakistan Crypto Council since 2025, has overseen the development of the draft.
The regulatory framework aligns with international standards set by the Financial Action Task Force (FATF) and reflects a broader trend in the region toward formal oversight rather than outright bans. By requiring licensing and compliance, Pakistan aims to reduce illicit use of virtual assets while encouraging legitimate innovation.
Industry observers note that the draft’s emphasis on customer protection and reserve backing for stablecoins could influence how local exchanges and issuers structure their operations. The requirement that stablecoins maintain full reserves is similar to the reserve‑backing rules adopted by some jurisdictions in the European Union.
The consultation period is open to all stakeholders until 30 June 2026, giving firms and investors time to review the draft and submit comments. PVARA has stated that it will consider all feedback before finalizing the regulations.
The move is part of Pakistan’s broader strategy to integrate digital assets into its financial system. The country’s large unbanked population and growing interest in cryptocurrencies make a regulated environment attractive to both local and international service providers.
As of now, the draft has not yet been finalized, and no definitive timeline for the implementation of the licensing regime has been announced. Firms operating in Pakistan should monitor PVARA’s updates closely and prepare to meet the forthcoming compliance requirements.
The draft regulations represent a significant development in Pakistan’s approach to virtual assets, signalling a shift from a restrictive stance toward a structured regulatory framework that balances innovation with consumer protection.
