Pakistan passes the Virtual Assets Act 2026 to create a legal framework for crypto businesses and digital asset oversight.
The Virtual Assets Act requires crypto exchanges wallet providers and token issuers to secure licenses before operating.
Pakistan introduces strict penalties for unlicensed crypto operations under the Virtual Assets Act 2026.
Pakistan has officially announced a legal framework of cryptocurrencies. The Virtual Assets Act 2026 was passed in Parliament on March 6. The president signed the law the same day. As a result, digital asset regulation now forms part of the country’s legal system.
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Earlier, the sector was controlled by a provisional presidential ordinance of July 2025. That however, was not to be a permanent arrangement. The new legislation now replaces the earlier measure with a full legal structure.
The law also confirms the permanent role of the Pakistan Virtual Assets Regulatory Authority. The regulator now operates as a federal body with clear legal authority. Therefore, it can supervise crypto businesses with stronger backing.
In recent years, the crypto activity in Pakistan has been on the rise. It is estimated that 30 to 40 million individuals in the country sell or possess digital assets. Due to this huge number of users, authorities were forced to draft more explicit regulatory policies.
Licensing System Introduced for Crypto Service Providers
The new law requires crypto companies to obtain licenses before operating in Pakistan. This requirement applies to exchanges, custodians, and wallet providers. It also includes platforms involved in issuing digital tokens.
The Pakistan Virtual Assets Regulatory Authority will manage the licensing system. The regulator can approve, suspend, or cancel licenses when necessary. In addition, it can enforce compliance across the sector.
Earlier steps toward licensing started in 2025. In September that year, the regulator invited international crypto firms to apply. However, companies must already hold approval in major jurisdictions.
For example, firms must operate in regions such as the United States, the European Union, or Singapore. They must also meet minimum capital requirements. Furthermore, services must follow Sharia financial guidelines.
The law also grants operational authority to the regulator. It allows the authority to sign contracts and hold property. These powers help the regulator function as a fully established institution.
Heavy Penalties Target Unlicensed Crypto Operations
The Virtual Assets Act introduces strict penalties for rule violations. Running a crypto business without a license now carries serious consequences. Authorities may impose fines reaching PKR 50 million.
In addition, offenders could face prison sentences of up to five years. These penalties apply to any firm offering crypto services without approval.
The law also addresses unauthorized digital asset promotions. Launching or advertising an unapproved token offering can lead to penalties. Offenders may face fines of up to PKR 25 million.
Authorities may also impose prison sentences lasting up to three years. Through these rules, regulators aim to limit illegal activity in the crypto market.
The law also strengthens financial oversight. Regulators will enforce anti-money laundering rules across the sector. They will also monitor compliance with counter-terrorism financing standards.
Government Plans Virtual Asset Zones to Support Growth
The legislation also includes measures designed to support the digital asset industry. The government can create special virtual asset zones across the country. These zones aim to attract blockchain and financial technology companies.
Officials have not yet announced the locations of these zones. Even so, the measure signals interest in building a stronger fintech environment.
The law also outlines the structure of the regulatory authority. Representatives from major financial institutions will participate in oversight. These include the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan.
Independent industry experts will also join the authority. Meanwhile, some exchanges have already started the regulatory process. Pakistan approved Binance and HTX to register local subsidiaries under new crypto regulations. HTX received a No Objection Certificate in December 2025.
Binance received a similar preliminary clearance during the same period. However, these clearances do not allow the exchanges to operate yet. Both companies must complete the full licensing process before launching services in Pakistan.