Pakistan Forms Crypto Authority to Oversee Digital Assets

Pakistan has officially created the Pakistan Virtual Assets Regulatory Authority (PVARA) as an independent regulator tasked with supervising virtual asset service providers (VASPs), aligning operations with Financial Action Task Force (FATF) guidelines, and adopting global best practices. 

Overview

On July 8 2025, a report by English-language outlet Dawn revealed that PVARA will function as an independent body responsible for licensing, overseeing, and regulating virtual asset service providers. It will also ensure adherence to global standards, including those the FATF sets. The move, approved by the federal cabinet, marks a significant milestone towards legal clarity in what was formerly an unregulated and often opaque crypto sector.

The authority’s mandate is comprehensive: from issuing licences and enforcing compliance to technical oversight and public protection measures involving anti‑money laundering (AML) and cybersecurity protocols. The government envisions PVARA as the linchpin of a secure and transparent institutional framework, supporting trust, attracting international capital, and stimulating responsible innovation across Pakistan’s digital asset economy.

Building on Momentum: From Crypto Council to Digital Assets Authority

This regulatory breakthrough builds on earlier steps taken earlier this year. On March 14 2025, Pakistan launched the Pakistan Crypto Council (PCC) to foster blockchain adoption and draft nascent crypto policies. Finance Minister Muhammad Aurangzeb chairs the PCC, which is supported by a board that includes top-level regulators like the State Bank Governor and the SECP Chairman. Bilal Bin Saqib was appointed CEO, bringing his entrepreneurial and policy expertise to drive regulatory strategy.

Under this leadership, Pakistan has already made bold moves:

• In April, the PCC engaged Changpeng Zhao, ex‑CEO of Binance, as a strategic adviser on blockchain frameworks.
• At Bitcoin (BTC) 2025 in late May, Saqib announced the formation of a National BTC Reserve, with plans to hold BTC in a sovereign national wallet under a “never sell” policy.
• Plans were revealed to allocate 2,000 megawatts of surplus electricity to support BTC mining initiatives and AI data‑centre operations.

These developments—anchored in Pakistan’s unorthodox yet forward‑looking strategy—reflect a broader ambition to monetise excess electricity, spur innovation, and position the country as a technological hub in South Asia.

Tension and Challenges: Regulation vs. Reality

Despite proactive measures, Pakistan faces a familiar challenge: a significant gap between high‑level policy and on‑the‑ground legal status. Crypto remains technically banned under existing Pakistani law, and regulators have repeatedly warned that private trading and related activity remain illegal. 

This has prompted criticism from domestic institutions and legal experts, who question the coherence of celebrating a sovereign BTC reserve while enforcing a de facto ban. Moreover, security and energy supply are delicate issues. Assigning 2,000 MW to mining and AI centres may strain a grid already plagued by inefficiencies and tariff volatility—challenges that authorities must manage carefully. 

Policymakers must also ensure that ambitious global-level initiatives align with local legal frameworks and resonate with the 40 million Pakistanis engaged in electronics and online freelancing via crypto.

Outlook: Balancing Innovation with Regulation

A unique blend of ambition and caution shapes Pakistan’s journey into Web3 and digital finance. The simultaneous creation of the Crypto Council and PVARA signals a serious commitment to digital asset governance, not mere policy posturing. Maintaining credibility requires a more coherent legal stance, ensuring domestic laws align with PVARA’s regulatory licence regime.

Future success will hinge on bridging high‑level intention with grassroots legal reform, strengthening energy infrastructure, and earning public trust. Regional peers like the UAE, Singapore, and Japan have shown that crypto can drive innovation and economic growth, but only under stable regulatory ecosystems. Pakistan’s regulatory ratification this July takes a pivotal step in that direction, but much remains to be done.