Pakistan opens VASP licensing as new crypto rules take effect

Pakistan’s Virtual Assets Regulatory Authority has opened its licensing system and given existing crypto service providers until Sept. 5 to apply for preliminary approval or stop operating in the country.

The Associated Press of Pakistan reported on Aug. 22 that PVARA had notified its virtual asset licensing regulations and launched the application portal under the Virtual Assets Act, 2026, completing the rules needed to license and supervise exchanges and other virtual asset service providers.

Companies that were already providing virtual asset services on or before March 5 fall under the transitional provisions of the law. PVARA’s licensing portal requires them to submit an application for a no-objection certificate, or NOC, by Sept. 5, after which firms that have not applied must cease operations.

Operating after the deadline without filing an application will constitute an offense under Section 70 of the Virtual Assets Act, according to the regulator. The requirement applies as Pakistan moves existing domestic and overseas providers into a formal system where continued access to the market depends on regulatory approval.

“The licensing window is officially open, creating a clear pathway for businesses to enter Pakistan’s regulated virtual asset market,” PVARA said in a LinkedIn statement, adding that the regime sets standards covering consumer protection, governance, compliance and market integrity.

PVARA licensing rules cover 10 virtual asset activities

Under the notified framework, PVARA has created licence categories covering advisory services, broker-dealer operations, custody, exchanges, lending and borrowing, derivatives, virtual asset management, transfer and settlement, token issuance and mining-related services.

The regulator’s licensing portal states that applicants can seek one or more categories depending on the services they intend to provide. Exchange licences cover platforms offering swaps between virtual assets and fiat currencies or between different digital assets, while custody licences apply to firms holding or controlling assets or access credentials on behalf of customers.

Derivatives operators, portfolio managers and firms facilitating crypto lending are covered separately. PVARA has also created licence categories for asset-referenced and fiat-referenced token issuers, alongside businesses providing mining, validation or related infrastructure services.

To secure a full VASP licence, applicants must establish a company in Pakistan under the Companies Act 2017 and meet minimum paid-up capital requirements tied to their licence category. Directors and key personnel are also subject to fit-and-proper checks, while operators must maintain anti-money laundering controls, transaction monitoring systems, cybersecurity protections and business continuity arrangements, according to PVARA.

Customer assets receive separate safeguards under the regulations. PVARA Chairman and Minister of State Bilal Bin Saqib said licensed providers must segregate client holdings from company assets and cannot lend or pledge customer assets without written consent.

Requirements across the regime also cover governance, market conduct, prudential standards, operational resilience, technology and anti-money laundering and counter-terrorism financing controls, according to the APP report.

Existing crypto firms can take the NOC route

For companies preparing to establish a licensed Pakistani entity, the NOC process begins with the submission of a business plan and corporate documents. Receiving preliminary approval allows the applicant to proceed with regulatory compliance requirements before incorporating a local subsidiary and applying for a full VASP licence.

PVARA lists registration with the Financial Monitoring Unit among the compliance steps that follow an NOC. Local incorporation then takes place under the Companies Act 2017 before the company submits its full licensing application.

A separate regulatory sandbox provides another route for businesses testing new virtual asset products. Firms admitted to the sandbox can operate within limits agreed with PVARA while meeting reporting, asset-safeguarding and disclosure requirements. Successful completion of the testing process can be followed by an application for a VASP licence.

The final rules followed a public consultation held from June 11 through July 2, which also included a stakeholder webinar, according to Saqib. PVARA was established as a permanent statutory regulator in March after parliament passed the Virtual Assets Act, giving the authority responsibility for licensing and supervising the country’s crypto service sector.

During the rulemaking process, the regulator was also dealing with questions over the use of cryptocurrencies as payments. In July, crypto.news reported on discussions between Saqib and Islamic scholar Mufti Taqi Usmani after a religious ruling rejected purchases made with cryptocurrencies including USDT. Saqib called for individual technical and Shariah reviews of different digital asset categories, while PVARA continued developing its licensing rules.

Licensed VASPs can access Pakistan’s banking system

The licensing structure also connects approved crypto businesses with Pakistan’s banking system, following a central bank policy change earlier this year.

On April 14, the State Bank of Pakistan issued Circular No. 10 of 2026 allowing regulated financial institutions to provide accounts to PVARA-licensed virtual asset service providers. The policy included Client Money Accounts designed to keep customer funds separate from a provider’s operating money.

The change ended an eight-year restriction on banking services for regulated digital asset providers. Banks must verify a VASP’s licence, perform due diligence and monitor its accounts, while continuing to comply with foreign exchange, anti-money laundering and counter-terrorism financing rules. Financial institutions cannot use their own capital or customer deposits to trade or hold virtual assets.

Supervision of licensed firms is being accompanied by a separate law-enforcement structure. Pakistan’s Federal Investigation Agency created a crypto unit in July within its National Command and Control Centre to investigate suspected cryptocurrency use in money laundering, terrorism financing and other crimes.

FIA Counter-Terrorism Wing Director Muhammad Athar Waheed said PVARA would remain responsible for regulating virtual assets, while the agency would investigate suspected criminal activity. The NC3 also houses functions involving anti-money laundering investigations, border monitoring, intelligence coordination, cyber patrols, dark-web investigations and cooperation with Interpol.

Binance and HTX can move toward full Pakistan licences

Some international exchanges entered Pakistan’s preliminary approval process before the full licensing regulations were notified.

Binance and HTX received initial regulatory clearances in December 2025, allowing the exchanges to register with Pakistan’s anti-money laundering system and prepare for full licence applications. The approvals did not authorize unrestricted operations at the time, but allowed both companies to proceed with the steps required under the developing regulatory framework.

During the same month, Pakistan signed a Binance agreement to study the tokenization of up to $2 billion in state-owned assets, including sovereign bonds, Treasury bills and commodity reserves such as oil, gas and metals. The non-binding memorandum required subsequent contracts and remained subject to regulatory approval.

With the licensing portal now operating, PVARA lists NOC issuance, Financial Monitoring Unit registration, local incorporation and a full licence application as the sequence for firms taking its NOC-to-licence route. Companies covered by the transitional provisions have until Sept. 5 to complete the first of those steps by submitting their NOC application.