tl;dr
Pakistan has launched the Pakistan Virtual Asset Regulatory Authority (PVARA) to regulate and license virtual asset service providers (VASPs), ensuring compliance with local laws and international standards. Established by the Virtual Assets Ordinance, 2025, PVARA will oversee VASPs serving Pakistan...
Pakistan has launched the Pakistan Virtual Asset Regulatory Authority (PVARA), marking a significant step in its ambition to become an Asian hub for digital assets. This new regulator will supervise, monitor, and license virtual asset service providers (VASPs), ensuring they comply with both local laws and international standards set by organizations such as the Financial Action Task Force (FATF). Approved by the federal Cabinet and established through the President’s Virtual Assets Ordinance, 2025, PVARA is empowered to issue licenses, set technical norms, and foster compliance across the sector.
The ordinance empowers PVARA to regulate any VASP wishing to serve Pakistani investors, requiring mandatory licensing. A regulatory sandbox will also be introduced, allowing emerging technologies and business models to be tested under supervision. This regulatory approach mirrors practices in other advanced markets but is tailored to Pakistan’s specific financial ecosystem, including a Sharia Advisory Committee to ensure compliance with Islamic law. The authority’s board includes key financial and government stakeholders, blending expertise to oversee the burgeoning digital asset space responsibly.
Alongside this regulatory push, the State Bank of Pakistan (SBP) is advancing plans to launch a pilot for a Central Bank Digital Currency (CBDC), a digital rupee. This initiative aims to catch up with regional and global peers who have already moved forward with CBDC implementation. Despite earlier delays since the project’s announcement in 2019, SBP Governor Jameel Ahmad confirmed that preparations are now well underway and the pilot will launch soon.
Meanwhile, Australia is accelerating its wholesale CBDC and tokenized deposits project, Project Acacia, involving major financial institutions such as Westpac and the Commonwealth Bank of Australia. This project will explore 24 use cases ranging from real asset transactions to proof-of-concept simulations, offering valuable insights into how digital money innovations might transform wholesale financial markets. Such examples highlight differing paces and strategies in adopting digital currencies globally, marking an evolving landscape where Pakistan’s new regulatory framework aims to position it as a competitive player in the Asian crypto ecosystem.