The federal government of Pakistan has officially begun the implementation of its much-anticipated virtual asset regulatory framework, marking a significant step towards modernizing the country’s financial landscape. This move signals the government’s intent to embrace technological innovation in finance while ensuring compliance with global standards and safeguarding the interests of all stakeholders.

High-Level Stakeholder Meeting in Islamabad

On Tuesday, Islamabad hosted a high-level meeting that brought together representatives from banks, exchange companies, and the jewellery sector. The gathering served as an introductory session for stakeholders to understand the new Virtual Assets Act, 2025. Senior officials briefed attendees on the essentials of the law, its implications for various sectors, and the practical steps for compliance and adaptation.

The Virtual Assets Act, 2025, received formal approval on July 9, 2025, after passing through the Cabinet, the Prime Minister, and the President. This swift legislative process underscores the urgency and priority the federal government has placed on regulating the virtual asset industry. The framework not only establishes the legal grounds for virtual asset operations but also aims to bring clarity, transparency, and accountability to the sector.

Establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA)

A cornerstone of the new regulatory regime is the creation of the Pakistan Virtual Asset Regulatory Authority (PVARA). PVARA is tasked with licensing, regulating, and monitoring all entities that deal in virtual assets, including cryptocurrencies. The authority’s formation is a direct response to the rapid growth of digital finance and the global trend toward greater oversight of crypto-related activities.

PVARA’s mandate extends to ensuring that all licensed entities comply with international standards, particularly those set by the Financial Action Task Force (FATF). This is crucial for maintaining the integrity of Pakistan’s financial system and for ensuring continued access to international markets. By adhering to these standards, Pakistan aims to prevent money laundering, terrorist financing, and other illicit activities that have sometimes been associated with the virtual asset sector globally.

Licensing for Banks and Exchange Companies

One of the key outcomes of the Islamabad meeting was the announcement that banks and exchange companies would now be eligible to obtain licenses to operate in the virtual asset space. This development is expected to significantly boost institutional participation in the sector, fostering a safer and more transparent environment for digital asset transactions.

The move also comes as a relief to many local banks and exchange companies that have so far operated in a regulatory grey area. With the new licensing regime, these institutions can expand their service offerings, develop innovative products, and tap into growing consumer demand for virtual asset services.

Central Bank’s Push for Digital Currency

In addition to the regulatory updates, the meeting featured remarks from central bank Governor Jameel Ahmed, who confirmed that the State Bank of Pakistan (SBP) is in the final stages of drafting legislation for a central bank digital currency (CBDC). Governor Ahmed also revealed plans for an imminent pilot project to test the feasibility and mechanics of a digital rupee.

The introduction of a CBDC is seen as a pivotal move in digitizing the country’s monetary system, streamlining transactions, and reducing the costs associated with physical currency. If successful, Pakistan would join a growing list of nations that are experimenting with or have already launched their own digital currencies.

Coordinated Policy through the Pakistan Crypto Council

The recent meeting is a continuation of the government’s ongoing effort to create a well-coordinated policy environment for virtual assets. In February 2025, authorities announced the formation of the Pakistan Crypto Council, a body designed to facilitate dialogue between the government, private sector, and other stakeholders on matters related to digital assets and blockchain technology.

By fostering collaboration and ensuring that policy decisions are informed by industry expertise, Pakistan hopes to maximize the benefits of virtual assets while minimizing associated risks.

Topics #central bank digital currency Pakistan #Pakistan cryptocurrency law #Pakistan virtual asset regulation #PVARA #trending pakistan