Pakistan has formally activated a licensing regime for cryptocurrency and other virtual-asset businesses, giving existing operators until September 5 to seek preliminary regulatory approval or stop operating in the country.The Pakistan Virtual Assets Regulatory Authority, or PVARA, has opened applications following the notification of regulations governing virtual-asset service providers. Companies operating on or before March 5, 2026, are classified as transitional operators and must submit an application for a no-objection certificate by the September deadline under the Virtual Assets Act, 2026.
Failure to apply by the deadline would require affected businesses to cease operations, while continuing to provide virtual-asset services without meeting the regulatory requirements could expose operators to enforcement action.
The move represents a significant shift in Pakistan’s treatment of cryptocurrency businesses. Authorities are moving from an environment in which access to traditional financial infrastructure was heavily constrained towards a system that permits digital-asset services under formal supervision, compliance requirements and licensing.
The framework covers businesses providing services including cryptocurrency exchanges, brokerage, custody, investment management, virtual-asset transfers, lending and borrowing, derivatives and token issuance. Mining-related virtual-asset services also come within PVARA’s regulatory structure.
Existing operators seeking to remain in the market must first obtain an NOC, which functions as preliminary approval rather than a final operating licence. The process requires applicants to provide corporate information, business plans and compliance documentation before progressing towards local incorporation and full licensing.
Applicants receiving preliminary approval are expected to complete applicable anti-money laundering registration and establish a company in Pakistan under the Companies Act, 2017. They can subsequently apply for the relevant virtual-asset service licence.
PVARA also offers a regulatory sandbox route for companies developing innovative products that need supervised testing before entering the broader market. Sandbox participants operate within agreed limits covering areas such as customers, duration, reporting and safeguards before becoming eligible to seek a full licence.
The licensing framework places particular emphasis on customer protection and separation of assets. Regulated providers are expected to keep customer holdings separate from their own property and maintain safeguards designed to prevent client assets from being used for unrelated corporate purposes without appropriate consent.
Cybersecurity, operational resilience, transparency and record keeping are also central to the regime. Providers face requirements relating to customer identification, sanctions screening, suspicious-transaction reporting and controls intended to combat money laundering, terrorist financing and other illicit financial activity.
The regulations were notified on August 21 following a public consultation conducted between June 11 and July 2. The consultation examined licensing standards, activity-specific requirements, prudential safeguards and continuing obligations imposed on virtual-asset businesses.
Formal banking access is another important component of the regulatory transition. Rules introduced earlier this year allow regulated financial institutions to provide banking facilities to PVARA-licensed virtual-asset businesses, including segregated accounts for customer money.
That development could address one of the principal difficulties faced by cryptocurrency companies attempting to operate formally in Pakistan. Access to banking services provides regulated operators with channels for corporate payments, customer settlements and compliance monitoring that were difficult to obtain under the earlier approach to the sector.
The government is seeking to balance expansion of the digital-asset economy with concerns over financial crime, consumer losses and capital movements. Pakistan has a sizeable population of cryptocurrency users, although precise estimates of ownership and trading volumes vary substantially because much of the activity developed outside regulated domestic financial channels.
PVARA’s establishment reflects a broader attempt to bring those transactions into an identifiable regulatory perimeter. The authority has warned that virtual-asset products, stablecoin projects, tokenisation arrangements and blockchain-based financial services requiring regulatory approval should not be launched solely on the basis of private partnerships or commercial agreements.
Foreign cryptocurrency companies targeting users in Pakistan will also fall within the framework where their activities amount to providing covered virtual-asset services in or from the country. The rules therefore have implications for international exchanges and digital-asset platforms serving Pakistani customers without a locally licensed structure.
Topics
World