Virtual Assets get legal backing in Pakistan

July 09, 2025 (MLN): The Government of Pakistan has formally approved the “Virtual Assets Act, 2025,” following endorsements from the Federal Cabinet, the Prime Minister, and the President of Pakistan, said a press release issued by Office of the Special Assistant to PM/Minister of State on Blockchain and Crypto today. 

The law establishes the Pakistan Virtual Asset Regulatory Authority (PVARA), an autonomous federal body empowered to license, regulate, and supervise entities dealing in virtual assets.

The Authority has been granted comprehensive powers to ensure transparency, compliance, financial integrity, and the prevention of illicit activities, in alignment with international standards including those of the Financial Action Task Force (FATF).

The Board of the Authority will include key government stakeholders, such as the Governor of the State Bank of Pakistan, Secretaries of Finance, Law and Justice, and Information Technology and Telecommunications, as well as the Chairpersons of the Securities and Exchange Commission of Pakistan (SECP), the Federal Board of Revenue (FBR), and the Digital Pakistan Authority.

Additionally, two independent directors with expertise in virtual assets, law, finance, or technology will be appointed by the Federal Government.

The Chairperson, appointed on the basis of demonstrated experience in finance, law, technology, or regulatory affairs, will oversee the Authority’s functions.

Under the Act, any person or company intending to offer virtual asset services in or from Pakistan must be licensed by the Authority.

A structured licensing regime will be introduced, with specific requirements for incorporation, operational capacity, compliance frameworks, and reporting obligations.

The legislation also incorporates a framework for responsible innovation by establishing a regulatory sandbox, allowing emerging technologies and business models to be tested under supervisory oversight.

In addition, the Authority may issue no-action relief letters under defined conditions to facilitate experimentation while preserving regulatory accountability.

To ensure compatibility with Islamic finance principles, the law mandates the formation of a Shariah Advisory Committee, which will advise the Authority on matters related to the Shariah compliance of virtual asset products and services.

Licensed entities offering Islamic financial products will be bound by the rulings issued by the Committee.

The Act also provides for the establishment of a Virtual Assets Appellate Tribunal to hear appeals against regulatory decisions. The Tribunal will function with judicial independence and a specialized bench comprising experts in law, finance, and technology.

With this forward-looking legislation, Pakistan takes a major step in shaping a secure, inclusive, and innovation-friendly digital financial ecosystem, ensuring that technological progress is matched with institutional readiness and public interest safeguards.

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