Islamabad, September 14, 2025 – The government of Pakistan has taken a landmark step toward regulating its growing digital assets market by inviting international cryptocurrency exchanges and Virtual Asset Service Providers (VASPs) to apply for operating licenses.
This invitation is being issued by the newly established Pakistan Virtual Asset Regulatory Authority (PVARA), under the Virtual Assets Ordinance, 2025, which came into effect in July. The Block
What is the New Licensing Call?
- PVARA has issued an Expression of Interest (EoI) for global crypto exchanges and VASPs to seek local licenses to operate in Pakistan.
- The move is aimed at formalizing the sector, aligning it with international standards like those of FATF, IMF, and World Bank.
- Pakistan’s crypto-user base is estimated at over 40 million, with annual trading volume exceeding USD $300 billion. This makes the country one of the fastest-growing frontier markets for virtual assets.
Key Eligibility & Requirements
To apply for licensing, firms must meet certain criteria:
- They must be already licensed in at least one major, reputable jurisdiction (examples cited include: US (e.g. SEC etc.), UK (FCA), EU regulatory framework, UAE, or Singapore).
- Must provide detailed documentation such as company profile, existing licences, operational overview (which includes trading, custody, security measures), compliance history, business model for Pakistan’s market.
- Must demonstrate compliance with Anti-Money Laundering (AML), Counter Terrorism Financing (CFT) / Combating Terror Financing (CTF), Know Your Customer (KYC) and cybersecurity norms.
- The authority also intends to provide regulatory sandboxes and is considering Shariah-compliant innovation (inclusion of Islamic finance aspects).
- Applications are to be accepted on a rolling basis, and via email in PDF format.
Regulatory Framework & Context
- The Virtual Assets Ordinance, 2025, promulgated on July 8, and published in the Gazette on July 9, 2025, established PVARA as a regulator with powers to license, regulate, and supervise virtual asset related services.
- One of the goals is to comply with international regulatory norms especially FATF standards, to reduce risks associated with digital assets (fraud, money laundering, illicit flows).
- The regulation seeks to protect consumers, enhance transparency, encourage fintech innovation, and integrate digital asset activities into the broader financial and legal system of Pakistan.
What It Means for Global Crypto Firms & Pakistan
- For global firms, this is an opportunity to enter one of the fastest-expanding crypto markets in South Asia under a legal and regulated framework.
- For Pakistan, formal regulation means more oversight, potential revenue from licensed businesses, possible increases in foreign investment, better control of risks, and protection for consumers.
- However, there are challenges: firms will need to ensure they meet compliance requirements, adapt to Pakistan’s regulatory expectations, possibly accommodate Shariah law or cultural/regulatory norms.
Risks & Considerations
- The crypto market globally is volatile and regulatory risk remains. Even with licensing, changes in government policy could affect operations.
- Firms will have to invest in compliance infrastructure—strong KYC, AML, cybersecurity—possibly at substantial cost.
- Given Pakistan’s past warnings from the State Bank regarding crypto usage, firms may face scrutiny or limitations in banking, payments, or fiat-on/-off ramp integration.
Outlook & Next Steps
- Interested crypto firms should prepare by ensuring their existing licenses are in order, compliance frameworks are robust, and they understand Pakistan’s market, legal, and cultural expectations.
- PVARA’s governing board includes representatives from State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), and the Federal Board of Revenue (FBR). Coordination among regulators will be important. AInvest
- The licensing process could take several weeks to months, depending on the quality of application and due diligence required.
Conclusion
Pakistan’s invitation to global crypto firms to apply for operating licenses marks a decisive shift in its regulatory stance toward digital assets. With over 40 million users and huge market activity, the virtual assets sector is being brought into a formalized regulatory framework that aims for global compliance, consumer protection, and innovation. For global crypto firms, this is both an opportunity and a challenge—those that meet the criteria can become early entrants into officially regulated crypto operations in Pakistan.
