Pakistan has formally introduced a licensing system for virtual asset service providers, requiring existing operators to apply for regulatory approval by September 5, 2026, or stop providing services. The Pakistan Virtual Assets Regulatory Authority (PVARA) has notified new licensing regulations and launched its online application portal under the Virtual Assets Act, 2026. The move establishes a formal regulatory structure for the country’s rapidly growing virtual asset sector. The new framework includes 10 licence categories covering major activities such as cryptocurrency exchanges, custody services, broker-dealer operations, advisory services, lending and borrowing, derivatives, asset management, transfer and settlement, asset issuance and mining-related services. Each category will be subject to specific rules covering business conduct, financial safeguards, technology standards and anti-money laundering and counter-terror financing requirements. Existing virtual asset service providers have been given a statutory deadline of September 5. Under Section 70 of the Virtual Assets Act, businesses that were already providing such services before the law came into force must submit an application for a No-Objection Certificate by the deadline. Those failing to submit an application will be required to cease operations, while continuing to operate without applying after the deadline will constitute an offence. PVARA Chairman and Minister of State Bilal Bin Saqib said the regulatory system was designed to bring an already active market into the formal economy. He said young Pakistanis had helped build the virtual asset market before the state had established a regulatory structure for it. The new system, he added, would provide legal protections for customers while creating opportunities for legitimate businesses. Under the regulations, licensed service providers will be required to keep customer assets separate from their own holdings. They will also be prohibited from lending or pledging customer assets without written consent and will face legal obligations regarding the protection of client holdings if a platform encounters financial difficulties. The licensing system follows a public consultation held between June 11 and July 2, 2026. The consultation also included a webinar for stakeholders to provide feedback on the proposed framework. The licensing process will operate in two stages for applicants planning to establish businesses in Pakistan. They can either enter a regulatory sandbox or obtain a No-Objection Certificate under Section 19 before incorporation and subsequently seek a full licence. Existing operators, however, must submit their NOC applications by September 5. The new framework also provides licensed virtual asset businesses with access to Pakistan’s formal banking system. The State Bank of Pakistan’s Circular No. 10 of 2026, issued on April 14, allows regulated financial institutions to open accounts for PVARA-licensed virtual asset service providers, including segregated client money accounts. This replaces the restrictions on banking services for virtual asset businesses that had remained in place since 2018. PVARA was established as a permanent statutory authority through an Act of Parliament in March 2026. Within months, the authority secured a formal banking framework for licensed operators and completed the licensing regulations following public consultation.
