Summary
- The Pakistan Virtual Assets Regulatory Authority has launched its licensing portal, mandating firms operating before March 5 to apply for a No Objection Certificate by September 5 or cease operations.
- The Virtual Assets Act 2026 outlines 11 categories of licenses for exchanges, custody, lending, derivatives, stablecoin issuance, and mining activities.
- Firms must register as companies in Pakistan and obtain clearance from the Financial Monitoring Unit prior to applying for a license.
Crypto businesses in Pakistan are racing against time to comply with a new licensing process set by the Pakistan Virtual Assets Regulatory Authority, with less than two weeks left to register or shut down. The deadline is September 5 for companies that were operational as of March 5, when the new law took effect.
These companies are categorized as transitional persons and are required to apply for a No Objection Certificate by the looming deadline. The PVARA has emphasized that failing to submit an application by this date constitutes an offense under Section 70 of the Virtual Assets Act 2026. The licensing portal is also available for full licenses and regulatory sandbox applications.
In a televised announcement, Chairman Bilal bin Saqib explained the regulations, asserting that they aim to safeguard investors from fraudulent activities and establish legal governance in the market. He noted that the framework extends beyond just monitoring exchanges, suggesting that stablecoins and tokenization could enhance funding avenues for exports, remittances, and smaller enterprises.
The licensing categories include exchanges, custody services, broker-dealer operations, advisory services, lending, derivatives, discretionary asset management, transfer and settlement, mining infrastructure, and token issuance linked to assets or fiat currencies. Firms may apply for multiple licenses if desired.
Requirements for Licensees
To apply for a license, firms must be registered under the Companies Act 2017 in Pakistan, meet the minimum paid-up capital requirements specific to their category, and pass a fit and proper test for directors and key personnel. They must also implement anti-money laundering protocols that include customer verification, transaction monitoring, and reporting of suspicious activities. Additional requirements include cybersecurity measures and a business continuity plan.
Firms that obtain a license will be required to keep customer assets separate from their own and cannot lend or pledge these assets without written consent. PVARA has clarified that these obligations are now legal requirements. In exchange for compliance, licensed firms will gain access to the formal banking sector, which has historically posed challenges, particularly after an eight-year ban on banks servicing crypto companies was recently lifted.
Once a No Objection Certificate is granted, firms must register with the Financial Monitoring Unit of Pakistan, establish a local subsidiary, and then apply for a license. Consequently, offshore exchanges serving Pakistani clients must establish a local presence to continue operations. Notably, Binance and HTX have already secured certificates.
PVARA was established in July 2025 through a presidential ordinance, initially a temporary measure valid for 120 days, and was later made permanent by this year's legislation. It oversees a market ranked third in the Chainalysis 2025 global crypto adoption index, with Islamabad also revealing plans for a strategic Bitcoin reserve and the formation of a unit within the Federal Investigation Agency in July to combat the illicit use of digital currencies.