TLDR

  • Pakistan has passed the Virtual Assets Act 2026, designating PVARA as the permanent regulator for the cryptocurrency sector.
  • The new law sets out licensing regulations and imposes strict penalties on unlicensed cryptocurrency firms.
  • Exchanges, custodians, and token issuers are required to obtain approval from PVARA.
  • Binance and HTX have initiated the licensing process under Pakistan’s new cryptocurrency regulatory regime.
  • The government has connected the regulatory framework with mining plans and a strategic Bitcoin reserve.

Pakistan has enacted the Virtual Assets Act 2026, which establishes PVARA as the permanent national regulator for digital assets. The legislation creates a licensing framework and introduces criminal penalties for unapproved cryptocurrency operations. The law also empowers PVARA to supervise exchanges, custodians, and token issuers throughout Pakistan.

Virtual Assets Act 2026 Establishes Permanent Regulatory Authority

The parliament has approved the Virtual Assets Act 2026, laying a statutory foundation for cryptocurrency oversight. The law transforms PVARA from a temporary entity into a permanent federal authority. As a result, the regulator now has full powers to license and supervise virtual asset service providers.

President Asif Ali Zardari signed the legislation after both parliamentary chambers passed the bill. The Senate approved the measure on February 27, and the National Assembly followed suit on March 3. The law will come into effect after its publication in the official government Gazette.

PVARA has been operating under a presidential ordinance introduced in July 2025. That ordinance provided only temporary regulatory authority. The new act grants PVARA permanent status and expands its enforcement powers.

The statute authorizes PVARA to issue, suspend, and revoke licenses for cryptocurrency companies. These companies include exchanges, custodians, and platforms that facilitate token issuance. The regulator may acquire property and enter into contracts to support its regulatory activities.

Pakistan is among the world’s largest cryptocurrency markets, with tens of millions of users. However, digital asset trading previously lacked a clear national legal framework. The new law introduces well – defined oversight for the sector.

Licensing System Introduces Compliance and Market Entry Requirements

The legislation imposes penalties on companies operating without authorization. Unlicensed cryptocurrency activities may result in fines of up to PKR 50 million and prison terms of up to five years. Authorities will also penalize unauthorized token promotions or offerings.

Separate penalties are targeted at illegal marketing or fundraising related to virtual assets. Such violations may lead to fines of up to PKR 25 million and prison sentences of up to three years. These rules strengthen the enforcement against unlawful digital asset activities.

PVARA continues to process license applications from international cryptocurrency firms. The regulator launched its licensing program in September 2025 to attract regulated operators. Pakistan’s large cryptocurrency user base was a central part of that strategy.

Applicants must already be recognized in major jurisdictions such as the United States, the European Union, or Singapore. They must also meet the capital requirements set by regulators. These conditions aim to ensure stable operations and credible market participation.

Firms must also comply with Islamic finance principles in accordance with national policy guidelines. A Sharia advisory committee will review the services offered by licensed companies. This requirement integrates religious financial standards into Pakistan’s digital asset oversight.

Strategic Policy Links Regulation With National Crypto Initiatives

Several global exchanges have already started the preliminary licensing process. PVARA issued No Objection Certificates to Binance and HTX in December 2025. These approvals allow both companies to begin the regulatory registration process.

The exchanges must register with Pakistan’s Financial Monitoring Unit to comply with anti – money laundering regulations. They must also establish local subsidiaries while preparing full license applications. However, regulators have not yet permitted either platform to operate.

Authorities plan to create dedicated virtual asset zones to attract blockchain companies. The law authorizes PVARA to develop these zones as technology and investment hubs. Officials have not yet determined the specific locations.

PVARA has also linked the new regulatory structure to broader digital finance initiatives. The government has announced plans for a strategic Bitcoin reserve and the expansion of mining infrastructure. Authorities have allocated approximately 2,000 megawatts of surplus electricity for mining and data centers.

Officials have also signed a memorandum with an affiliate of World Liberty Financial. The agreement explores stablecoin systems for cross – border payments and digital finance infrastructure. These initiatives position PVARA as the central authority guiding Pakistan’s regulated cryptocurrency market.