Pakistan’s Parliament has officially passed the Virtual Assets Act, 2026, a landmark law set to regulate the country’s fast-growing digital finance sector. The act establishes the Pakistan Virtual Assets Regulatory Authority (PVARA), tasked with licensing, supervising, and regulating virtual asset service providers across the country. The framework is designed to protect investors, increase market transparency, and maintain the integrity of the virtual assets ecosystem while encouraging innovation in blockchain and fintech.
PVARA, initially formed under a Presidential Ordinance in July 2025, will now operate with full legislative backing. The Authority has broad powers to combat money laundering, terrorist financing, and other illicit activities linked to virtual assets, ensuring Pakistan meets international standards such as those set by the Financial Action Task Force (FATF).
The authority is structured as a corporate body led by a chairperson appointed by the federal government. Its members include ex-officio officials from the Finance Ministry, Law Ministry, State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), and the Anti-Money Laundering Authority (AMLA). Independent experts also participate, bringing specialized knowledge to the board. PVARA can set operational standards, supervise custody and reserves, enforce cybersecurity requirements, and carry out inspections, funded through fees, fines, and government grants.
Under the law, all virtual asset service providers, including exchanges, custodians, and lending platforms, must obtain a license. Providers need a No-Objection Certificate, meet fit-and-proper criteria, maintain sufficient capital, segregate assets, and undergo proof-of-reserves audits. Compliance with AML/CFT regulations is mandatory. Issuers of fiat- or asset-backed tokens must maintain 100% reserves, provide redemption options, and make full disclosures. Operating without a license or offering initial virtual offerings (IVOs) is strictly prohibited.
The act also bans market manipulation, insider trading, and algorithmic stablecoins that lack safeguards. Penalties include fines of up to PKR 50 million, imprisonment, or license revocation. Appeals can be made to the Virtual Assets Appellate Tribunal.
Additional measures include regulatory sandboxes, oversight of mining operations, data localization rules, and a Shariah advisory framework. Coordination with the SBP, SECP, and the Financial Monitoring Unit ensures cohesive enforcement. Existing providers have six months to comply, either by obtaining a license or halting operations.
