September 15, 2025 — Pakistan has taken a major step toward formalizing its vast cryptocurrency market by inviting international exchanges and digital asset service providers to apply for operating licenses. The move follows the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA), a new federal body created under the Virtual Assets Ordinance 2025, promulgated in July.
The initiative positions Pakistan as one of the latest emerging markets to introduce structured oversight for cryptocurrencies, aiming to balance innovation with regulatory safeguards.
A Market Too Big to Ignore
According to government figures, Pakistan’s virtual asset ecosystem is massive: more than 40 million users participate in crypto markets, generating an estimated $300 billion in annual trading volumes. Until now, this activity has largely operated without formal regulation, raising concerns over consumer protection, financial crime, and systemic risk.
By launching a licensing regime, the government aims to transform one of the world’s largest unregulated markets into a compliant, transparent, and internationally aligned digital finance hub.
“This EoI is our invitation to the world’s leading VASPs to partner in building a transparent and inclusive digital financial future for Pakistan,” said Bilal bin Saqib, chairman of PVARA and minister of state for crypto and blockchain.
Framework Aligned with Global Standards
PVARA’s regulatory framework has been designed to meet international best practices, particularly those outlined by the Financial Action Task Force (FATF), the International Monetary Fund (IMF), and the World Bank.
The authority’s mandate covers:
Licensing and supervision of exchanges and service providers
Enforcement of anti-money laundering (AML) and counter-terrorism financing (CTF) rules
Implementation of robust cybersecurity requirements
Ensuring consumer protection and financial stability
Eligibility to apply is limited to exchanges and companies that are already licensed by top-tier regulators. These include the U.S. Securities and Exchange Commission (SEC), UK Financial Conduct Authority (FCA), European Union VASP framework, UAE Virtual Assets Regulatory Authority (VARA), and the Monetary Authority of Singapore (MAS).
Stringent Compliance Requirements
Applicants are expected to demonstrate strict adherence to know-your-customer (KYC) protocols and provide a comprehensive dossier of corporate and financial details. Submissions must include:
Company profile and governance structure
Existing regulatory licenses
Description of services offered and technology protocols
Assets under management and revenue figures
Compliance and enforcement history
In addition, prospective licensees must outline proposed business models tailored for the Pakistani market, addressing how they plan to balance growth with regulatory obligations.
Applications will be accepted on a rolling basis via PVARA’s official email address, ensuring a streamlined process for global players interested in entering the market.
Oversight and Governance
PVARA functions as an autonomous federal authority with a multi-stakeholder governance model. Its board includes top financial regulators: the Governor of the State Bank of Pakistan, the Chairman of the Securities and Exchange Commission, and the Chairman of the Federal Board of Revenue.
This cross-institutional oversight structure is intended to ensure regulatory cohesion while safeguarding the integrity of the financial system.
Beyond Regulation: Building a Fintech Future
While licensing and compliance form the backbone of the framework, PVARA’s ambitions extend well beyond supervision. The authority has laid out broader goals to:
Protect consumers from fraud and financial mismanagement
Prevent illicit finance and systemic risks
Encourage innovation in fintech, remittances, and tokenized assets
Foster Shariah-compliant financial innovation through regulatory sandboxes
These sandboxes will allow startups and global firms to test digital asset products in a controlled environment, giving Pakistan’s financial ecosystem room to innovate while minimizing risks.
Strategic Implications
For Pakistan, the move signals a pivot toward embracing digital finance at a national level. Long a hotbed for informal cryptocurrency trading, the country is now seeking to bring legitimacy to the sector, potentially unlocking investment opportunities and financial inclusion initiatives.
International exchanges stand to gain access to a rapidly growing market with a tech-savvy population. At the same time, Pakistan’s alignment with global regulatory standards could improve its standing with international financial watchdogs, especially in light of past scrutiny over AML/CTF compliance.
“By opening its doors to licensed global players, Pakistan is not only securing its domestic market but also sending a signal that it is ready to play by international rules,” said one industry analyst.
The Road Ahead
The coming months will reveal which international exchanges step forward to apply and how quickly the framework translates into live operations. Much will depend on PVARA’s ability to balance rigorous oversight with an enabling environment that encourages innovation.
Still, the groundwork has been laid for a transformation of Pakistan’s crypto landscape—from an unregulated giant to a globally integrated digital asset market.
