Islamabad, July 9, 2025 – Pakistan has formally adopted a comprehensive legal framework for crypto currencies, marking a significant step toward embracing digital innovation while ensuring regulatory oversight and financial transparency.
The “Virtual Assets Act, 2025” has been officially approved by the Federal Cabinet, the Prime Minister, and the President of Pakistan, according to a statement released by the Office of the Special Assistant to the Prime Minister/Minister of State on Blockchain and Crypto. This landmark legislation paves the way for establishing a modern regulatory framework for digital assets.
Under the new law, the Pakistan Virtual Asset Regulatory Authority (PVARA) has been created as an autonomous federal institution. The Authority will be responsible for licensing, regulating, and supervising entities engaged in virtual assets and crypto-related activities across Pakistan. PVARA has been empowered with broad oversight to promote compliance, financial integrity, and combat illicit financial flows in line with international standards, including guidelines from the Financial Action Task Force (FATF).
The Authority’s governing board will include senior officials such as the Governor of the State Bank of Pakistan, Secretaries of Finance, Law and Justice, Information Technology and Telecommunications, and Chairpersons of the SECP, FBR, and the Digital Pakistan Authority. In addition, two independent directors with expertise in finance, law, or technology will also be appointed. The Chairperson, selected for their experience in finance, law, or regulatory matters, will lead the institution.
A mandatory licensing regime will be introduced for any person or business wishing to offer crypto or virtual asset services in or from Pakistan. The process will include detailed requirements for incorporation, governance, operational capacity, risk management, and reporting obligations.
Notably, the law includes provisions for a regulatory sandbox that allows fintech innovations to be tested in a controlled environment. The Authority may also issue no-action letters under defined conditions to foster responsible experimentation without triggering enforcement actions.
To ensure alignment with Islamic principles, a Shariah Advisory Committee will guide the Authority on the Shariah compliance of crypto and virtual asset products. Licensed providers offering Islamic financial services must comply with the Committee’s rulings.
The Act also establishes a Virtual Assets Appellate Tribunal to handle appeals against regulatory decisions. With judicial independence and a panel of legal and tech experts, the Tribunal adds another layer of accountability.
With this legislation, Pakistan signals its readiness to embrace the future of crypto finance within a robust legal and ethical framework.