Pakistan’s Strategic Move Toward Crypto Regulation
Pakistan is stepping into the dynamic world of cryptocurrency, opening its doors to international crypto businesses. The recent announcement by the Pakistan Virtual Asset Regulatory Authority (PVARA) reveals an invitation for leading exchanges and virtual asset service providers (VASPs) to apply for licenses under a new federal framework. This bold initiative signals a significant turning point for the country’s approach to digital assets.
The Invitation to Investors
On a recent Saturday, PVARA called upon major crypto firms to submit Expressions of Interest (EoIs) for participating in Pakistan’s burgeoning digital asset market. Bilal bin Saqib, the chair of PVARA and minister of state for crypto and blockchain, emphasized that this invitation is aimed at fostering a transparent and inclusive digital financial future for the nation. His vision portrays a partnership that can elevate Pakistan’s position in the global cryptocurrency landscape.
Strict Eligibility Criteria
To maintain a robust regulatory framework, the eligibility to apply for licenses is limited to firms that are already recognized and licensed by reputable regulators. This includes authorities such as the U.S. Securities and Exchange Commission (SEC), the UK’s Financial Conduct Authority, the European Union (EU) VASP framework, the United Arab Emirates (UAE) Virtual Assets Regulatory Authority, and Singapore’s Monetary Authority. This strict criterion aims to ensure that only reputable firms with established compliance records enter the market.
The submission process is comprehensive, requiring interested parties to present detailed company profiles that include existing licenses, proposed services (like trading and custody), technology and security standards, and even a specific business model tailored for the Pakistani market. By focusing on such stringent requirements, PVARA hopes to mitigate risks associated with illicit finance while unlocking fintech and tokenization opportunities.
Regulatory Framework and Its Objectives
PVARA was established under the Virtual Assets Ordinance of 2025, tasked with the critical responsibility of licensing, regulating, and supervising VASPs. The overarching aim is to align Pakistani regulations with global standards set by pivotal organizations such as the Financial Action Task Force (FATF), the International Monetary Fund (IMF), and the World Bank. This alignment is crucial for building trust and security in the digital asset ecosystem, fostering both local and international participation.
PVARA’s strategic framework also focuses on opportunities for Shariah-compliant products, demonstrating Pakistan’s intent to cater to its diverse financial landscape. These initiatives underscore a progressive approach to digital finance, ensuring that both traditional and innovative financial products coexist.
Rapid Growth in Crypto Adoption
Interestingly, Pakistan has made significant strides in cryptocurrency adoption, recently ranking third in the 2025 Global Crypto Adoption Index by Chainalysis. This rise showcases not only an increasing level of interest and engagement among the Pakistani populace but also positions the country as one of the fastest-growing crypto markets worldwide.
In further efforts to strengthen its position, the government announced plans for a Bitcoin Strategic Reserve, reflecting its pro-crypto regulatory stance. Speaking at the Bitcoin 2025 conference, Bilal bin Saqib elaborated on these ambitions. The government is also focusing on energy for cryptocurrency operations, allocating 2,000 megawatts of surplus electricity specifically for Bitcoin mining and AI centers. This initiative, supported by the Ministry of Finance, illustrates Pakistan’s comprehensive strategy to embed cryptocurrency within its economic fabric.
Challenges Ahead
However, the journey is not without challenges. The IMF has raised concerns about the potential ramifications of leveraging surplus electricity for crypto mining, especially regarding the sustainability of such initiatives. Their rejection of a proposal to offer subsidized power to energy-intensive industries, including Bitcoin miners, highlights the delicate balance between innovation and regulatory prudence that Pakistan must navigate.
By meticulously crafting a regulatory environment that invites global players while ensuring compliance and security, Pakistan is poised to become a significant player in the digital asset arena. The ongoing developments in cryptocurrency regulation present a fascinating landscape to watch closely as the country evolves its financial systems to accommodate the demands and opportunities of a digital economy.