Pakistan has implemented the Virtual Assets Act 2026, which establishes the Pakistan Virtual Assets Regulatory Authority (PVARA) for the regulation of the nation’s digital financial sector.
It now meets a requirement associated with the International Monetary Fund (IMF) programme.
The legislation, which has recently received parliamentary approval, officially creates the Pakistan Virtual Assets Regulatory Authority as the national governing body for virtual asset markets and service providers.
PVARA was initially established in July 2025 through a presidential ordinance, however, the new legislation grants it permanent legal authority.
What will Virtual Assets Regulatory Authority do?
In accordance with the Act, the authority is tasked with licensing virtual asset service providers that operate within or from Pakistan and overseeing their operations.
Additionally, it will regulate digital asset markets and ensure adherence to financial, security, and legal standards.
The law encompasses measures designed to combat money laundering and the financing of terrorism within the virtual asset ecosystem.
Officials have stated that the framework aims to enhance the oversight of digital financial activities while facilitating the integration of emerging financial technologies.
According to the Virtual Assets Regulatory Authority, unlicensed cryptocurrency activities may result in penalties that include fines reaching up to Rs. 50 million and potential imprisonment.
The government aims to reduce illegal financial transactions and regulate the rapidly expanding sector.
It is important to note that this law comes after several recent policy measures designed to regulate the digital finance landscape in Pakistan.
In March 2025, the government established the Pakistan Crypto Council to develop national policies regarding blockchain and cryptocurrency.
It further hopes to synchronise regulations among various institutions, including the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan.
Govt establishes crypto testing framework
In February, the Pakistan Virtual Assets Regulatory Authority (PVARA) launched a framework aimed at testing cryptocurrencies to regulate digital assets, allowing companies to innovate with new products and services under official supervision.
This initiative, formally referred to as a regulatory “sandbox,” created a controlled environment where businesses in Pakistan can test crypto-related services with the oversight of the regulator before obtaining full approval.
PVARA further stated that the sandbox will support practical applications including tokenisation, stablecoins, remittances, and the infrastructure for on and off ramps.
