ISLAMABAD – Pakistan took major step toward regulating cryptocurrency sector as Pakistan Virtual Asset Regulatory Authority (PVARA) shared the draft of the Virtual Asset Services Regulations 2026, proposing mandatory licensing, stricter compliance standards and enhanced investor protections for crypto businesses operating in the country.
The regulatory authority shared its draft Virtual Asset Services Regulations 2026, opening framework for public consultation, marking one of the country’s most significant moves yet toward establishing a comprehensive rulebook for digital assets.
The regulations would make licensing mandatory for all virtual asset service providers operating in Pakistan. Existing businesses would be granted a six-month transition period to meet the new requirements or risk falling outside the regulatory framework. Broad licensing structure comprising 10 categories covers cryptocurrency exchanges, custodians, brokers, lending platforms, asset managers, token issuers and other virtual asset-related businesses.
The regulator is also looking beyond Pakistan’s borders. Foreign exchanges that actively target Pakistani users could be required to obtain local authorisation, potentially bringing some of the world’s largest crypto platforms under PVARA’s oversight if they wish to continue serving the country’s market.
The draft rules impose stringent obligations on firms, including customer protection measures, anti-money laundering controls, know-your-customer compliance, cybersecurity safeguards, governance requirements and enhanced risk-management standards.
All firms would be subject to capital and liquidity requirements, while stablecoin issuers would have to maintain 100% reserve backing. Customer assets would also be required to remain fully segregated from company funds, reducing the risk of client losses in the event of corporate distress. The proposal shows Pakistan’s increasingly proactive stance on digital assets, signalling a preference for regulation and integration rather than an outright ban on the industry.
The development comes as global policymakers continue to grapple with financial and geopolitical risks linked to emerging markets and strategic trade routes.
