In a major regulatory development, the Government of Pakistan has officially begun implementing its newly approved virtual asset framework, marking a pivotal moment in the country’s approach to digital currencies and blockchain-based finance. As part of this effort, the federal government announced that licensed banks and exchange companies will now be permitted to operate in the virtual asset space under the Virtual Assets Act, 2025.
The formal announcement came during a high-level meeting held in Islamabad earlier this week, attended by key representatives from the banking sector, foreign exchange companies, and the jewellery industry. The session served as an orientation for stakeholders to understand the scope and objectives of the Virtual Assets Act, which received formal approval on July 9, 2025, after passing through all required stages of cabinet, prime ministerial, and presidential clearance.
At the heart of the new regulatory framework is the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA), a dedicated oversight body that will be responsible for licensing, regulating, and supervising all virtual asset-related activities in the country. PVARA has been tasked with ensuring that all participating institutions comply with international norms, including the anti-money laundering and counter-terrorism financing standards set by the Financial Action Task Force (FATF).
Under this framework, commercial banks and currency exchange companies will be eligible to receive licenses enabling them to offer crypto-related services, including trading, custody, and settlement. This shift opens the door for regulated participation in the digital asset ecosystem, potentially positioning Pakistan to tap into the global momentum behind crypto and blockchain innovations.
State Bank of Pakistan (SBP) Governor Jameel Ahmed was also present at the meeting and confirmed that the central bank is in the final stages of developing legislation to support the launch of a central bank digital currency (CBDC). He shared that a pilot phase of Pakistan’s own digital currency is expected to be initiated soon, signaling a dual-track approach toward digital transformation in finance—one through regulated cryptocurrencies and another through sovereign digital money.
This meeting follows earlier announcements in February 2025, when the government introduced the Pakistan Crypto Council, a policy advisory group formed to align virtual asset adoption strategies and coordinate public-private sector efforts in digital finance.
The Virtual Assets Act 2025 is seen as a strategic response to the growing influence of decentralized finance and the need to create a secure, regulated environment that protects investors while encouraging innovation. With a robust licensing regime now in motion, Pakistan becomes one of the few countries in the region to provide a legal pathway for financial institutions to participate in the crypto economy.
As PVARA prepares to issue operational guidelines, industry participants are expected to begin formal applications in the coming months. The success of this regulatory rollout will depend on the government’s ability to balance innovation with security, enabling broader access to virtual assets while mitigating risks of misuse or volatility.
By licensing financial institutions under a clear legal structure, Pakistan signals a significant shift toward digital financial modernization—an approach that could have wide-reaching implications for capital markets, remittances, and financial inclusion.