Pakistan has not discovered crypto. Crypto has discovered Pakistan. For years, virtual assets have been traded and held by Pakistani users without a clear domestic license. This was never a market that waited outside of regulation. It was already in, moving through phones, offshore exchanges, Telegram groups and informal networks.
This is why the Virtual Assets Act 2026 matters. It establishes the Pakistan Virtual Asset Regulatory Authority, or PVARA, to license, regulate and monitor virtual assets and service providers. Done properly, this is not a surrender to speculation. It is the state that admits that ignoring a market does not make it disappear.
PVARA is empowered to classify virtual assets by their function, use and economic impact, not by what fancy name a promoter assigns them. It matters because abuse hides behind fashionable words. A product can be sold as ‘innovation’ while functioning as an investment scheme. A wallet marketed as practical can serve as a cross-border value transfer. Where financial knowledge remains patchy, regulation must protect people from technology used to hide old-fashioned fraud.
Comparative experience helps, but Pakistan should not copy blindly. The US shows the cost of fragmentation: digital assets caught between securities, commodities and money transfer rules, confusing businesses and consumers alike. Pakistan should not import that chaos. PVARA cannot be a solitary authority. The Act requires explicit cooperation with the State Bank, SECP, Financial Monitoring Unit, FBR and law enforcement, including timely and secure sharing of supervisory and enforcement information. Market participants should know who regulates what, what requires a permit and what risks trigger banking, tax or anti-money laundering surveillance.
Britain offers another lesson: consumer protection must begin before a product is sold. Crypto damage rarely starts with code. It starts with advertisements, influencers, fake success stories and the promise of one lucky trade. The law addresses this directly. No person may advertise or market a Virtual Asset unless the issuer has a valid license and all marketing materials must include prescribed risk information. That’s the right instinct. Pakistan now needs the enforcement capacity to match the words.
The United Arab Emirates shows that clear rules can attract serious firms, but regulatory overlap can confuse the market. Pakistan should make PVARA the front door regulator with clear protocols as to when the state bank, SECP, FMU or FBR should step in. However, there is a structural tension that is worth seeing. The chairman is appointed by the federal government, which also retains the power to issue policy directives to PVARA. Operational autonomy is promised in law, but promises require institutional culture to keep them.
Singapore treats digital assets as part of a broader fintech strategy, not a stand-alone crypto experiment. Pakistan should follow that instinct. Virtual assets must sit alongside payment systems, cyber security, data protection and formal transfer channels. Crypto alone will not modernize an economy that relies on cash, informal transfers and weak documentation.
Stablecoins require special care. The law seems to set the bar right: Fiat-referenced tokens must be backed one hundred percent by high-quality liquid assets held in a segregated reserve redeemable at par without undue delay, with audited information and robust AML compliance. For Pakistan, remittances are used for school fees, rent, medicine and groceries. The reserve requirement is not bureaucratic prudence. It’s the difference between a real payment instrument and a gamble disguised as one.
Mining is sensitive. The law wisely excludes pure mining from licenses but subjects operations involving client assets to full regulation. If mining is allowed on a large scale, there should be no hidden subsidies and no diversion of electricity from productive use. That battle will be fought outside PVARA’s mandate, but Pakistan cannot afford to lose it. License must mean something. The law requires licensees to keep customer assets in fully segregated accounts and prohibits pledging those assets without the customer’s express, informed and revocable written consent. That provision exists because the stock markets are collapsing. Clients’ money must survive even when the platform does not. Tax treatment is yet to be worked out in practice and the role of the FBR is likely to be critical.
Success will not be measured by licensed exchanges, glossy conferences or fashionable startups. It will be measured by whether ordinary Pakistanis are protected from anonymous operators, offshore scams and influencer-led traps.
Pakistan’s crypto test is not whether it can sound modern, but whether it can manage modernity. In finance, technology is changing. Trust remains the oldest currency.
The author is an attorney of the highest courts and holds an LLM from the University of Pennsylvania Carey Law School.
Disclaimer: The views expressed in this piece are the author’s own and do not necessarily reflect Pakinomist.tv’s editorial policy.
Originally published in The News
