Pakistan has taken a monumental step in the cryptocurrency landscape by passing the Virtual Assets Act 2026. This legislation, which was signed into law by President Asif Ali Zardari, was approved by the Senate on February 27 and the National Assembly on March 3. The act creates a comprehensive legal framework for cryptocurrency operations within the country, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA) to oversee and regulate all virtual asset service providers, including exchanges, custodians, and token issuers.
The significance of this law cannot be overstated, especially considering that Pakistan ranks among the top three nations globally in terms of cryptocurrency adoption, boasting an estimated 30 to 40 million users. Previously, these activities were conducted without any legal framework, operating in a restrictive environment since a 2018 directive from the State Bank of Pakistan prohibited financial institutions from engaging with cryptocurrencies.
Under the new legislation, individuals engaging in unlicensed trading face severe penalties, including imprisonment for up to five years or fines reaching Rs. 50 million. Furthermore, the law addresses issues such as market manipulation and insider trading, ensuring that Pakistan aligns with international standards set by the Financial Action Task Force (FATF).
Bilal bin Saqib, Chairman of PVARA, emphasized that the law is designed for the “100 million young Pakistanis who deserve a financial system that works for them.” This acknowledgment highlights the potential of the younger demographic to drive financial innovation within the country.
Notably, major exchanges like Binance and HTX are already taking steps to comply with the new regulations. PVARA has granted No Objection Certificates to these exchanges, allowing them to initiate Anti-Money Laundering (AML) registration and establish local subsidiaries as they pursue full licensing.
This legislative move is part of a broader national strategy aimed at harnessing the benefits of cryptocurrency. Pakistan has also announced plans to create a strategic Bitcoin reserve, allocate 2,000 megawatts of surplus electricity for Bitcoin mining and AI data centers, and has signed a Memorandum of Understanding (MoU) with an affiliate of World Liberty Financial, linked to former President Trump, to explore stablecoin infrastructure for facilitating cross-border payments.
Additionally, the framework includes a Shariah Advisory Committee, positioning Pakistan as one of the pioneering nations to integrate Islamic finance principles into its cryptocurrency regulations. This unique approach could attract a diverse range of participants in the crypto space, further solidifying Pakistan”s commitment to developing a robust and inclusive financial ecosystem.
