Before July 2025, owning or trading cryptocurrency in Pakistan was a legal gray zone. The State Bank of Pakistan had warned against it, but no law explicitly banned it. People used crypto anyway-millions of them. Now, everything has changed. The Pakistan Virtual Assets Regulatory Authority (PVARA) is officially in charge. This isn’t just another rule change. It’s the end of the wild west and the start of a structured, regulated digital asset market.
What Is PVARA, and Why Does It Matter?
PVARA is Pakistan’s first and only federal regulator for virtual assets. Created by the Virtual Assets Regulatory Authority Ordinance 2025, signed into law on July 8, 2025, it’s not a department under the State Bank or SECP. It’s an independent body with full authority to license, inspect, fine, and shut down crypto businesses operating in Pakistan. Think of it like the SEC for crypto-but designed specifically for Pakistan’s market. Its job is simple on paper: protect users, stop money laundering, and make sure only trustworthy companies run crypto services. But behind that simplicity is a complex system. PVARA doesn’t just want to control crypto-it wants to build a legitimate, global-grade digital finance ecosystem. That means attracting big international players, not just blocking random exchanges.Who Needs a PVARA License?
If you’re running any kind of virtual asset service in Pakistan, you need PVARA’s approval. That includes:- Crypto exchanges (buying, selling, trading BTC, ETH, etc.)
- Custody wallets (storing crypto for clients)
- Crypto payment processors (accepting crypto for goods/services)
- Staking platforms and DeFi services
- Token issuance platforms
How to Get Licensed: The EoI Process
PVARA isn’t handing out licenses to just anyone. They’ve set a high bar from day one. To even apply, you must:- Already be licensed by a recognized foreign regulator (like the FCA in the UK, MAS in Singapore, or VARA in Dubai)
- Submit a full company profile with ownership structure
- Provide proof of assets under management (AUM) and revenue history
- Detail your cybersecurity and AML/CFT systems
- Explain how your services will work specifically in Pakistan
What Happens If You Don’t Comply?
Operating without a PVARA license is now illegal. The consequences are serious:- Fines up to 10 million PKR (about $35,000 USD) for each violation
- Immediate suspension of operations
- Blacklisting from future licensing
- Coordination with law enforcement for criminal investigations if fraud or money laundering is suspected
How PVARA Compares to Other Countries
Pakistan didn’t copy a model-it picked the best parts from several. Here’s how it stacks up:| Feature | PVARA (Pakistan) | FCA (UK) | VARA (UAE) | SECP (India) |
|---|---|---|---|---|
| Regulator Type | Independent federal authority | Financial conduct watchdog | Specialized crypto regulator | Securities regulator (crypto under review) |
| License Required? | Yes, mandatory | Yes | Yes | Not yet, but under discussion |
| Foreign License Accepted? | Yes, only from top-tier regulators | Yes, with additional requirements | Yes, with local setup | No |
| CBDC in Progress? | Yes, pilot planned | No | Yes, in testing | Yes, pilot launched |
| Shariah-Compliant Products | Explicitly encouraged | Not a focus | Allowed | Not addressed |
What’s Next for Pakistan’s Crypto Market?
PVARA is still new. Many details-like exact fees, reporting formats, and KYC standards-are still being finalized. But the direction is clear:- International firms will start applying for licenses in early 2026
- The first wave of licensed exchanges could launch by mid-2026
- A CBDC pilot, managed by the State Bank, is expected to begin in late 2026
- Local fintech startups are already preparing to build compliant wallets and payment tools
What Should You Do Now?
If you’re a Pakistani crypto user:- Stop using unlicensed exchanges. They’re now operating illegally.
- Watch for official announcements from PVARA about licensed platforms.
- Keep your records. If you’ve traded crypto before, you might need to prove your activity for compliance.
- Review the EoI requirements on PVARA’s official portal (when launched).
- Get your international license in place if you don’t have one.
- Start building your AML/CFT systems now-don’t wait.
- Consider designing Shariah-compliant products. That’s a gap most global firms haven’t filled yet.
FAQ
Is cryptocurrency now legal in Pakistan?
Yes-but only if you use a PVARA-licensed service. Owning crypto isn’t illegal, but trading, exchanging, or providing services without a license is. The law doesn’t ban crypto; it brings it under formal regulation.
Can I still use Binance or Coinbase in Pakistan?
Not yet. Neither Binance nor Coinbase is licensed by PVARA as of December 2025. They’re likely applying, but until they’re approved, using them in Pakistan is technically against the law. PVARA has said it will only accept firms already licensed by top-tier regulators, so approval is possible-but not guaranteed.
What happens to my crypto if my exchange gets shut down?
If an unlicensed exchange is shut down, there’s no legal guarantee you’ll get your funds back. That’s why PVARA requires licensed providers to use cold storage, insurance, and segregated client accounts. Always use licensed services to protect your assets.
Does PVARA regulate NFTs and DeFi?
Yes. The law defines virtual assets broadly to include NFTs, tokens, and DeFi protocols if they’re used for investment, trading, or payment. Any platform offering these services to Pakistani users must get licensed.
Is there a deadline to apply for a PVARA license?
There’s no fixed deadline yet, but PVARA has said it will begin reviewing applications in early 2026. The sooner you apply, the better your chances of being among the first licensed operators. Delaying risks being left behind as the market consolidates around approved platforms.
Will PVARA allow crypto mining in Pakistan?
Mining isn’t directly regulated by PVARA-it falls under energy and industrial policy. But if a mining operation sells its mined crypto through a VASP, that VASP must be licensed. PVARA hasn’t banned mining, but it’s not encouraging it either, especially given Pakistan’s energy constraints.
Tyler Porter
December 20, 2025 AT 14:53This is huge! Finally, someone’s doing it right-no more shady exchanges, no more rug pulls. PVARA’s got teeth, and that’s exactly what Pakistan needed. I’ve seen too many people lose everything because they trusted some Telegram group with a fancy logo. Now, if you’re using a licensed platform, your money’s actually safe. This isn’t just regulation-it’s protection.
Rebecca F
December 20, 2025 AT 20:16Regulation is just control dressed up as safety. They’re not protecting users-they’re consolidating power. Crypto was freedom. Now it’s just another bank with a blockchain sticker. Welcome to the surveillance economy, folks.
Ashley Lewis
December 22, 2025 AT 16:28The regulatory framework is impressively structured, with clear jurisdictional boundaries and international alignment. The inclusion of Shariah-compliant products demonstrates a nuanced understanding of cultural context. However, enforcement remains the critical variable.
vaibhav pushilkar
December 22, 2025 AT 18:13Big win for Pakistan. Most countries either ban crypto or ignore it. Pakistan chose to lead. The foreign license requirement is smart-no random offshore ops. And Shariah-compliant DeFi? That’s a goldmine. I’ve been waiting for this since 2021.
SHEFFIN ANTONY
December 23, 2025 AT 14:34Oh please. They’re just scared of losing control. Look at how they’re forcing everyone to get licensed by the FCA or MAS-this isn’t regulation, it’s colonialism with a tech twist. Why should a Pakistani startup need Dubai’s approval to operate here? This is gatekeeping disguised as innovation.
Vyas Koduvayur
December 24, 2025 AT 02:23Let’s be real-this is the most coherent crypto regulatory model I’ve seen since Singapore’s 2020 framework. The EoI requirements are brutal but necessary. Most crypto firms in emerging markets are just shell companies with fake audits. PVARA’s demanding real financials, real cybersecurity, real compliance teams. That’s not overreach-that’s hygiene. And the fact they’re allowing Shariah-compliant products? Brilliant. Most Western regulators treat Islamic finance like an afterthought. Here, it’s baked into the DNA. I’ve worked with 12 crypto startups in India and Pakistan over the last five years. Zero had proper AML systems. PVARA’s standards will force real change. The 10 million PKR fine? Barely a slap on the wrist for a firm making millions in unregulated volume. But it’s a start. And the CBDC pilot? That’s the real endgame. They’re not just regulating crypto-they’re building a parallel financial infrastructure. This isn’t about controlling users. It’s about giving them a real alternative to the broken banking system. If they execute well, Pakistan could become the Dubai of South Asian fintech. Not bad for a country that was told crypto was illegal five years ago.
Lloyd Yang
December 24, 2025 AT 20:04I’ve been watching this unfold from the sidelines, and honestly? This gives me hope. I know a guy in Lahore who lost his life savings on a fake exchange last year-he thought he was trading Bitcoin, but the site just vanished. He cried for days. Now, if PVARA can make sure that never happens again, it’s worth every byte of bureaucracy. The fact they’re requiring real international licenses? That’s not a barrier-it’s a filter. It stops the scammers before they even get in the door. And the Shariah angle? That’s genius. Millions of people in Pakistan want to participate in crypto but avoid interest-based systems. This isn’t just compliance-it’s inclusion. I’m not saying it’ll be perfect. There will be hiccups. But for the first time, there’s a clear path forward. No more guessing. No more hoping. Just rules. And rules mean safety. And safety means trust. And trust? That’s what builds real markets.
Craig Fraser
December 26, 2025 AT 10:51Regulation is inevitable, but this feels less like innovation and more like capitulation. Why not build a homegrown system instead of importing FCA standards? And why the obsession with foreign licenses? This isn’t empowerment-it’s dependency. Also, the energy grid can’t handle mining, but they’re fine with crypto exchanges sucking up power? Hypocritical.
Zavier McGuire
December 26, 2025 AT 18:02Finally someone gets it. No more sketchy apps. If you’re not licensed you’re a criminal. Simple. No drama. Just rules. I’ve been waiting for this for years