Pakistan Launches Licensing Framework for Virtual Asset Services

Pakistan has formally launched a licensing system for virtual asset service providers, giving existing crypto-related operators until September 5, 2026 to submit applications for regulatory approval.

 

Minister of State and Chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA) Bilal bin Saqib announced the launch of the Pakistan Virtual Asset Regulation Service 2026, describing the framework as a key step toward developing the country’s digital economy.

 

The new regulatory architecture, established under the Virtual Assets Act 2026, allows PVARA to license and supervise virtual asset service providers across 10 categories. These include exchanges, custodians, broker-dealers, advisory services, lending and borrowing, derivatives, asset management, transfer and settlement, asset issuance and mining-related services.

 

Each licence category comes with specific requirements covering financial safeguards, consumer protection, technology standards, conduct and anti-money laundering and counter-terrorism financing measures.

 

Existing Operators Face September 5 Deadline

 

Under Section 70 of the Virtual Assets Act, operators that were providing virtual asset services before the law came into force must apply for a no-objection certificate by September 5.

 

Those continuing operations after the deadline without submitting an application could face criminal liability and be required to cease their activities.

 

The authority has also introduced two routes for new applicants. Businesses can either enter a supervised regulatory sandbox or obtain a no-objection certificate under Section 19 before incorporating and applying for a full licence.

 

Crypto Firms to Gain Banking Access

 

The new framework also opens the door for regulated virtual asset businesses to access Pakistan’s formal banking system.

 

The State Bank of Pakistan’s Circular No. 10, issued in April 2026, permits regulated banks to provide accounts to licensed virtual asset service providers, including segregated accounts for customer funds. The move effectively reverses restrictions that had limited banking access for crypto businesses since 2018.

 

Under the new rules, licensed providers must keep customer funds and assets separate from their own assets and cannot lend or pledge client assets without written consent.

 

Focus on Blockchain and Tokenisation

 

Bilal bin Saqib said the regulatory framework goes beyond supervising crypto exchanges and is intended to support broader applications of blockchain technology.

 

Future stages are expected to focus on areas including remittances, cross-border payments, digital exports, trade finance and tokenised securities. Officials also see potential for tokenisation to help exporters unlock working capital by linking trade receivables and other assets with global capital markets.

 

The authority said Pakistan could also develop opportunities in Islamic finance through tokenised financial products.

 

The licensing regulations follow public consultations held between June 11 and July 2, 2026. The regulatory framework was developed within roughly six months after Parliament established PVARA as a permanent statutory body in March.

 

The government now aims to bring Pakistan’s existing virtual asset market into a formal regulatory structure while creating a framework for investment, innovation and wider digital financial services.