Pakistan Passes Virtual Asset Act 2026, Establishing Crypto Regulatory Framework

Pakistan's parliament officially passed the Virtual Asset Act 2026 on March 6, marking the country's first integration of crypto assets into its national legal system. The President signed the bill into law the same day, replacing the temporary presidential order issued in July 2025, and establishing a stable, long-term regulatory foundation for the digital asset industry.

The new law establishes the permanent status of the Pakistan Virtual Asset Regulatory Authority (PVARA), granting it federal-level regulatory powers. The agency will be fully responsible for the licensing, compliance supervision, and penalties for crypto businesses. It has corporate functions such as signing contracts and holding assets, ensuring its effective operation as an independent regulatory entity.

With the number of crypto users in Pakistan climbing to between 30 million and 40 million, regulatory pressure has been increasing. To regulate the market, the Act requires all crypto service providers—including exchanges, custodians, wallet providers, and token issuance platforms—to obtain an operating license issued by PVARA. Applicant companies must meet capital thresholds and have operating entities in compliant jurisdictions (such as the United States, the European Union, or Singapore), while also complying with Islamic finance principles. For unlicensed crypto businesses, the law sets severe penalties: illegal operations can be fined up to 50 million Pakistani Rupees and may face up to five years in prison; unauthorized token promotion can be fined up to 25 million Rupees, and those involved can be sentenced to up to three years in prison. In addition, the Act strengthens anti-money laundering and counter-terrorism financing regulations, requiring all licensed institutions to strictly implement customer due diligence and transaction monitoring. To promote industry development, the government also plans to establish virtual asset special zones to create a policy-friendly ecosystem for compliant enterprises, promoting digital financial innovation and regularization.