On July 9, 2025, Pakistan’s Federal Cabinet, led by Prime Minister Shehbaz Sharif and President Arif Alvi, approved the Virtual Assets Act 2025, establishing the Pakistan Virtual Asset Regulatory Authority (PVARA) to regulate cryptocurrencies by Shariah principles.
The Act establishes PVARA, an autonomous body responsible for licensing and overseeing virtual asset entities, ensuring transparency and compliance with the Financial Action Task Force (FATF) standards. The board comprises the State Bank of Pakistan (SBP) Governor, the SECP Chairperson, and experts in finance and technology. A Shariah Advisory Committee will ensure compliance with Islamic finance, while a Virtual Assets Appellate Tribunal will handle appeals.
According to Reuters, PVARA mandates licensing for all virtual asset services in Pakistan, with requirements for incorporation, compliance frameworks, and reporting. A regulatory sandbox enables the testing of new technologies under supervision, while no-action relief letters provide support for innovation. The Act aligns with SBP’s digital currency pilot, announced on July 9, 2025, which is expected to boost Pakistan’s $20 billion crypto transaction volume. Critics, such as economist Kaiser Bengali, warn of regulatory overreach.
The Act builds on the establishment of the Pakistan Crypto Council in March 2025 and the $14.5 billion in reserves held by the State Bank of Pakistan (SBP). This follows a significant 26.6% increase in remittances, which reached $38.3 billion for fiscal year 2025 (FY25). This legislation responds to the Financial Action Task Force’s (FATF) 2024 demand for crypto regulation and aims to curtail illicit activities. Currently, 93% of remittances are processed through formal channels. Public sentiment is largely positive, with 60% of respondents supporting oversight for cryptocurrency, according to a Gallup Pakistan survey.
