In a significant move to regulate its burgeoning digital economy, the Government of Pakistan has formally approved the “Virtual Assets Act, 2025.” The comprehensive legislation, endorsed by the Federal Cabinet, Prime Minister, and President, aims to establish a robust framework for virtual assets, ensuring financial integrity and fostering innovation.
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At the heart of the new law is the creation of the Pakistan Virtual Asset Regulatory Authority (PVARA), an autonomous federal body. PVARA will be responsible for licensing, regulating, and supervising all entities dealing in virtual assets within or from Pakistan. The Authority is vested with extensive powers to ensure transparency, compliance, and the prevention of illicit activities, aligning Pakistan with international standards, including those set by the Financial Action Task Force (FATF).
The PVARA Board will comprise key government officials, including 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), Federal Board of Revenue (FBR), and the Digital Pakistan Authority. Additionally, two independent directors with specialized expertise in virtual assets, law, finance, or technology will be appointed by the Federal Government. The Authority’s functions will be overseen by a Chairperson, selected for their demonstrated experience in relevant fields.
Under the Act, any individual or company seeking to offer virtual asset services in or from Pakistan will be required to obtain a license from PVARA. This structured licensing regime will outline specific requirements for incorporation, operational capacity, compliance frameworks, and reporting obligations.
To encourage technological advancement, the legislation also introduces a regulatory sandbox, allowing new technologies and business models to be tested under supervisory oversight. The Authority may also issue “no-action relief letters” under defined conditions to facilitate experimentation while maintaining regulatory accountability.
A unique feature of the Act is the mandate for a Shariah Advisory Committee. This committee will provide guidance to PVARA on ensuring the Shariah compliance of virtual asset products and services, with licensed entities offering Islamic financial products bound by its rulings.
Furthermore, the Act provides for the establishment of a Virtual Assets Appellate Tribunal. This independent body will hear appeals against regulatory decisions, featuring a specialized bench composed of experts in law, finance, and technology.
With this forward-looking legislation, Pakistan is taking a decisive step towards shaping a secure, inclusive, and innovation-friendly digital financial ecosystem, ensuring that technological progress is balanced with institutional readiness and safeguards for public interest.
