Pakistan Ushers in New Era for Digital Finance with Virtual Assets Regulation
The Pakistani Senate has passed a landmark bill to regulate virtual assets, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA). This move comes just before a presidential ordinance on the matter was set to lapse, signaling a commitment to formalizing the country’s approach to cryptocurrencies and digital finance.
What Does the New Legislation Entail?
The core aim of the bill is to create a dedicated regulatory body – PVARA – with the power to license, regulate, and supervise virtual asset service providers, and issuers. This framework seeks to bolster investor protection, enhance market transparency, and maintain market integrity within Pakistan’s burgeoning digital asset landscape.
Combating Illicit Activities
A key focus of the legislation is to combat money laundering, terrorist financing, and other illicit activities associated with virtual assets. PVARA will be mandated to coordinate with the Financial Monitoring Unit, the National Anti-Money Laundering and Counter Financing of Terrorism Authority, and law enforcement agencies to ensure compliance with both national and international standards.
Promoting Innovation and Investment
Beyond regulation, the bill aims to attract investment and encourage virtual asset companies to establish operations within Pakistan. It likewise emphasizes the promotion of responsible innovation, digital financial inclusion, and the development of compliant virtual asset markets. PVARA will actively promote the adoption and scalable use of blockchain and distributed ledger technologies across the country.
Binance and Pakistan: A Growing Partnership
This legislative development coincides with Pakistan’s increasing engagement with major players in the crypto industry. Recent agreements with Binance, for example, explore the potential ‘tokenization’ of up to $2 billion in assets and provide advisory support for a potential stablecoin launch. Pakistan has also allowed Binance and HTX to begin the process of applying for crypto exchange licenses.
Penalties for Non-Compliance
The bill outlines significant penalties for operating without a license or engaging in prohibited activities. Willfully providing an unlicensed virtual asset service could result in imprisonment for up to five years or a fine of up to Rs50 million, or both. Conducting an initial virtual asset offering in violation of the regulations carries a potential sentence of up to three years imprisonment or a fine of up to Rs25 million, or both. Market manipulation and insider trading are also subject to penalties.
Virtual Assets Appellate Tribunal
To ensure fair dispute resolution, the bill establishes a Virtual Assets Appellate Tribunal. Any aggrieved party can appeal decisions made by PVARA to this tribunal within 30 days of the decision being communicated.
From Ordinance to Law: A Timeline
The current legislation builds upon the ‘Virtual Assets Ordinance, 2025’ approved by President Asif Ali Zardari in July 2025. Initially issued as an ordinance due to parliamentary schedules, the bill’s passage through the Senate formalizes the regulatory framework.
FAQ
Q: What is PVARA?
A: The Pakistan Virtual Assets Regulatory Authority, established by the bill, is the body responsible for licensing, regulating, and supervising virtual asset service providers in Pakistan.
Q: What are the penalties for operating a crypto exchange without a license?
A: Individuals or entities operating without a license could face imprisonment for up to five years, a fine of up to Rs50 million, or both.
Q: What is tokenization?
A: Tokenization is the process of representing real-world assets, such as property or commodities, as digital tokens on a blockchain.
Q: Will this legislation impact existing cryptocurrency users in Pakistan?
A: The legislation aims to provide a safer and more regulated environment for cryptocurrency users, offering increased investor protection and market stability.
Did you know? Pakistan is exploring the use of blockchain technology beyond cryptocurrencies, aiming to leverage its benefits for various sectors of the economy.
Pro Tip: Stay informed about the evolving regulatory landscape of virtual assets by regularly checking updates from PVARA and relevant government sources.
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