ISLAMABAD – Pakistan’s Senate on Friday passed legislation to regulate virtual assets and formally establish the Pakistan Virtual Assets Regulatory Authority (PVARA), a body initially created through a presidential ordinance last year. The move comes as the original ordinance was nearing its expiration in early March.
The bill, moved by Finance Minister Muhammad Aurangzeb, was adopted with rules suspended to allow for immediate consideration, according to a copy of the legislation obtained by Dawn. The stated aim of the bill is to establish a dedicated regulatory body to license, regulate, and supervise virtual assets and service providers, with a focus on investor protection, market transparency, and integrity within Pakistan.
The legislation also seeks to provide a legal framework to combat money laundering, terrorist financing, and other illicit activities involving virtual assets, aligning with international standards. PVARA is envisioned as an autonomous corporate body with the authority to license and oversee virtual asset service providers and issuers operating within the country.
According to the bill’s text, PVARA will be responsible for safeguarding customers and investors, and maintaining the integrity of Pakistan’s virtual asset markets through the enforcement of appropriate safeguards and business conduct requirements. It will also establish risk-management standards and measures to prevent illicit use of virtual assets. The authority is further tasked with attracting investment and encouraging virtual asset businesses to establish operations within Pakistan.
The legislation emphasizes the promotion of responsible innovation, digital financial inclusion, and the development of compliant virtual asset markets, all within a framework designed to manage risks and support financial stability. PVARA will also be responsible for promoting, developing, and regulating the adoption of blockchain and distributed ledger technologies across Pakistan.
The bill outlines a collaborative role for PVARA with the Financial Monitoring Unit, the National Anti-Money Laundering and Counter Financing of Terrorism Authority, and law enforcement agencies to combat financial crimes related to virtual assets, in accordance with existing laws like the Anti-Money Laundering Act of 2010. PVARA will also advise the government on regulatory and technical matters related to virtual assets, digital asset markets, and emerging risks.
PVARA will be empowered to issue regulations, standards, and directives, as well as to approve, suspend, or revoke licenses. The authority will also set risk-management, cybersecurity, and data protection standards for virtual asset service providers. Administrative sanctions and fees will also be within PVARA’s purview.
The legislation also allows for the operation of regulatory sandboxes and the establishment of cooperation agreements with domestic and foreign regulators to facilitate information sharing and coordinated action.
The authority will be led by a chairperson appointed by the federal government, alongside two secretaries from the law and finance ministries, the State Bank of Pakistan governor, the Securities and Exchange Commission of Pakistan chairperson, the National Anti-Money Laundering and Counter Financing of Terrorism Authority chairman, the Pakistan Digital Authority chairperson, and two independent directors with relevant expertise. Directors will also be appointed by the federal government and will serve three-year terms, with the possibility of a one-time renewal.
The bill establishes penalties for unlicensed virtual asset services, punishable by up to five years imprisonment and/or a fine of up to Rs50 million. Conducting an initial virtual asset offering in violation of the regulations could result in up to three years imprisonment and/or a fine of up to Rs25 million. Market manipulation and insider trading are also subject to penalties.
A Virtual Assets Appellate Tribunal will be established to handle disputes, with its jurisdiction superseding that of other courts. Appeals to the tribunal must be filed within 30 days of the relevant order.
The establishment of PVARA initially occurred through the ‘Virtual Assets Ordinance, 2025’ approved by President Asif Ali Zardari in July 2025. Initial reports referred to the ordinance as an ‘Act’, causing confusion regarding the legislative process. Authorities later clarified that the regulation was an ordinance issued under Article 89 of the Constitution, remaining in effect for 120 days. The ordinance was extended for another 120 days in November 2025, pending the passage of this bill.
