ABS & Co has examined Pakistan’s introduction of the Virtual Assets Ordinance 2025, enacted on 8th July 2025, which establishes the country’s first comprehensive regulatory framework for virtual assets and Virtual Asset Service Providers. This landmark development marks a significant shift toward structured oversight of cryptocurrency and digital assets in Pakistan, providing long-awaited regulatory clarity for foreign crypto exchanges, fintech platforms, blockchain companies and other service providers seeking to enter and operate within a regulated virtual assets market.
As an Ordinance with a limited lifespan of 120 days (unless extended or formally enacted by Parliament), it was extended on 5th November 2025 by the Senate of Pakistan for a further period of 120 days until 5th March 2026. While some uncertainty remains over its permanence, the Government’s active steps, including the creation of the Pakistan Crypto Council, policy statements in support of regulated virtual assets, and the approval by the Economic Coordination Committee of a PKR 800 million grant for the Pakistan Virtual Assets Regulatory Authority, strongly indicate that the new virtual assets regulatory regime is intended to continue and will likely be extended or enacted into law by Parliament. Pakistan is one of the largest emerging cryptocurrency markets in the world, with nearly 40 million users and an estimated annual trading volume of USD 300 billion, creating significant potential for foreign investment and market expansion in the country’s virtual assets sector.
Under the Ordinance, the Pakistan Virtual Assets Regulatory Authority is established as the key regulator for Virtual Asset Service Providers (VASPs) in Pakistan, and the law prohibits the provision of Virtual Asset Services without: (1) incorporation of a company in Pakistan under the Companies Act, 2017 (branch offices are not sufficient); and (2) obtaining a valid VASP license from the Authority. Further, the Ordinance sets out licensing, governance, and local incorporation requirements for Virtual Assets Service Providers, along with minimum paid-up capital thresholds ranging from PKR 100 million to PKR 1 billion, depending on the nature of the activity.
The scope of Virtual Asset Services covered under the Ordinance includes:
- Advisory Services
- Broker-Dealer Services
- Custody Services
- Exchange Services
- Lending and Borrowing Services
- Virtual Asset Derivatives Services
- Virtual Asset Management and Investment Services
- Virtual Asset Transfer and Settlement Services
- Fiat-referenced Token Issuance Services
The VASP licensing process in Pakistan involves three key stages:
- Stage 1: Obtaining a No-Objection Certificate (NOC) from PVARA for incorporation of a company with the primary object of providing Virtual Asset Services;
- Stage 2: Successfully incorporating a company in Pakistan; and
- Stage 3: Applying to PVARA for a VASP license.
The VASP license approval period is 90 days from submission of a complete application, and licenses remain valid unless suspended or revoked by PVARA.
On 15th September 2025, the PVARA issued an invitation for Expressions of Interest (EOI) from global crypto exchanges and VASPs, marking an important step toward developing a regulated and transparent crypto ecosystem in Pakistan. Given the early stage of implementation, foreign crypto exchanges and blockchain ventures interested in entering Pakistan’s regulated crypto market are encouraged to engage with PVARA at the EOI stage. Early participation provides an opportunity to help shape the regulatory landscape, clarify VASP licensing requirements, and build credibility with regulators.
Engaging early with PVARA allows potential entrants to:
- Understand the practical aspects of the digital assets and licensing process in Pakistan;
- Request guidance on the development of licensing rules and regulations;
- Build relationships with regulators and key decision-makers;
- Establish credibility and demonstrate a commitment to regulatory compliance;
- Ensure readiness for operational launch once final VASP licensing procedures are issued.
Early and sustained engagement with PVARA will give foreign players strategic insights and a first-mover advantage in Pakistan’s fast-developing virtual assets sector. By developing a working relationship with the regulator now, businesses can anticipate virtual assets compliance requirements, influence regulatory understanding, and align with international best practices for virtual asset regulation and cross-border crypto operations.
Our Corporate and Commercial team comprising Partner Ahmed Reza Mirza, Senior Associate Khadeeja Ahmad and Associate Rahima Khurram advises FinTech’s, digital platforms, and emerging technology companies on regulatory compliance, transaction structuring, and market entry in Pakistan. The team has been closely following the recent introduction of the Virtual Assets Ordinance, 2025, and is well placed to guide clients on incorporation, licensing, and engagement with regulators under Pakistan’s evolving digital finance and virtual asset framework.
