Pakistan's Virtual Assets Regulatory Authority (PVARA) has officially opened its crypto licensing portal on August 22, following the issuance of final virtual-asset service regulations on August 21. As reported by The Associated Press of Pakistan, companies that were providing virtual asset services on or before March 5 fall under transitional provisions and must submit an application for a no-objection certificate (NOC) by September 5, after which firms that have not applied must cease operations. The deadline applies to providers that were already operating in Pakistan when the Virtual Assets Act took effect on March 5, with PVARA Chairman Bilal Bin Saqib stating that "this market [previously] existed without a clear regulatory pathway. Today, that changes. We now have the rules, the regulator and the licensing framework to bring virtual assets into the formal economy, protect consumers and build the foundation for the next generation of financial infrastructure." The rules do not amount to a nationwide crypto ban but create a comply-or-exit framework for exchanges, custodians and other virtual-asset businesses already targeting Pakistani users.
PVARA has established a separate regulatory sandbox for companies testing new products, though participation does not guarantee eventual licensing. The framework provides two routes to licensing - a sandbox pathway for firms testing new products and an NOC pathway for companies preparing to incorporate in Pakistan. Under the new transition rules, Binance and HTX are already further along in the process, having received NOCs in December 2025 and can now apply directly for full licenses rather than seeking fresh preliminary clearance. A timely, complete application lets an existing provider continue offering its current services while PVARA reviews the filing, although the regulator can impose interim limits on onboarding, products, transaction volumes, or custody. The NOC serves as preliminary regulatory clearance allowing firms to move toward full licensing applications, with PVARA stating that continuing to operate without an application after the September 5 deadline will constitute an offense.
The licensing framework covers 10 virtual asset activities including advisory services, broker-dealer operations, custody, exchanges, lending and borrowing, derivatives, virtual asset management, transfer and settlement, token issuance and mining-related services. As reported by The Associated Press of Pakistan, exchange licenses cover platforms offering swaps between virtual assets and fiat currencies or between different digital assets, while custody licenses apply to firms holding or controlling assets on behalf of customers. Derivatives operators, portfolio managers and firms facilitating crypto lending are covered separately, with PVARA creating license categories for asset-referenced and fiat-referenced token issuers alongside mining infrastructure services. The framework also provides two routes to licensing - a sandbox pathway for firms testing new products and an NOC pathway for companies preparing to incorporate in Pakistan, allowing VASPs to pursue an NOC before incorporating locally or enter a regulatory sandbox to test products under PVARA supervision.
For customers, the immediate impact will depend on whether their platform enters the regulatory process. The rules require nonfilers to stop covered services but do not prescribe a single process for shutting down trading, withdrawals or custody accounts. Licensed providers, however, must segregate customer assets, keep them available for timely return, and maintain withdrawal and claims channels during an orderly wind-down. PVARA considers a provider within scope if it markets or solicits customers in Pakistan, onboards users there, or supports Pakistani rupee payment rails. Simply having a website or app accessible in the country is not enough if the company does not target Pakistani customers and takes reasonable steps to prevent onboarding. The September 5 deadline therefore gives crypto firms serving Pakistan a clear choice: enter the licensing process and continue under regulatory oversight, or leave the market entirely.
The licensing structure connects approved crypto businesses with Pakistan's banking system following a central bank policy change. On April 14, the State Bank of Pakistan issued Circular No. 10 of 2026 allowing regulated financial institutions to provide accounts to PVARA-licensed virtual asset service providers, ending an eight-year restriction on banking services for regulated digital asset providers. Banks must verify VASP licenses, perform due diligence and monitor accounts while continuing to comply with foreign exchange, anti-money laundering and counter-terrorism financing rules. Financial institutions cannot use their own capital or customer deposits to trade or hold virtual assets. The State Bank of Pakistan subsequently allowed banks to provide accounts to licensed VASPs, including segregated client-money accounts, ensuring comprehensive banking integration for the regulated crypto sector.
