Pakistan has approved a new law regulating digital assets, creating a dedicated authority to oversee the sector as the country seeks to bring its fast-growing cryptocurrency market under a formal regulatory framework.
Parliament has passed the Virtual Assets Act, 2026, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA) to license, regulate and supervise virtual asset service providers operating in the country.
The law marks one of Pakistan’s most significant moves toward formalizing the digital asset sector, which has seen rising adoption despite the absence of a comprehensive regulatory structure.
Under the legislation, PVARA will be responsible for granting licenses to exchanges, custodians and other digital asset service providers while setting compliance standards aimed at ensuring market transparency, investor protection and operational integrity.
The authority was initially formed through a presidential ordinance in July 2025, but the passage of the law by parliament now provides a permanent legal basis for its operations.
The framework also grants PVARA powers to address financial crimes linked to digital assets, including money laundering, terrorist financing and other illicit activities.
Officials said the regulatory approach is designed to align Pakistan’s oversight of virtual assets with international anti-money laundering standards.
Authorities say the framework aims to support responsible financial innovation while preventing abuse in a sector that has often operated in regulatory grey areas.
The government also hopes the new framework will help encourage broader adoption of blockchain technology and digital finance tools, which proponents say could modernize Pakistan’s financial infrastructure and expand access to financial services.
Industry participants say demand for digital assets in Pakistan has been growing rapidly, even as the lack of regulatory clarity previously limited participation by mainstream investors and financial institutions.
Supporters of the new framework say clearer rules could help bring the market into the formal financial system and attract institutional participation.
Pakistan joins a growing number of countries moving to regulate the digital asset sector as governments attempt to balance innovation with concerns about consumer protection and financial stability.
The passage of the Virtual Assets Act signals Pakistan’s attempt to shift from an uncertain policy stance toward a structured digital asset regime.
By establishing PVARA and aligning its rules with global anti-money laundering standards, the country is positioning itself to legitimize a sector that has largely operated informally.