Pakistan has not discovered crypto. Crypto discovered Pakistan. For years, virtual assets have been traded and held by Pakistani users without a clear national license. There has never been a market awaiting regulation. It was already inside, circulating via phones, offshore exchanges, Telegram groups and informal networks.
This is why the Virtual Assets Act 2026 is important. It establishes the Pakistan Virtual Asset Regulatory Authority, or PVARA, to authorize, regulate and supervise virtual assets and service providers. Done right, this does not mean giving in to speculation. It is the State which admits that ignoring a market does not make it disappear.
PVARA is empowered to classify virtual assets based on their function, use, and economic impact, not the buzzword a developer gives them. This is important because abuse hides behind buzzwords. A product can be sold as an “innovation” while still functioning as an investment program. A wallet presented as convenient can serve as a cross-border transfer of value. Where financial literacy remains patchy, regulation must protect individuals from using technology to hide old-fashioned fraud.
Comparative experiences are useful, but Pakistan should not copy blindly. The United States shows the cost of fragmentation: digital assets are torn between rules relating to securities, commodities and monetary transmission, sowing confusion for businesses and consumers alike. Pakistan should not import this chaos. The PVARA cannot be an isolated authority. The law explicitly requires cooperation with the State Bank, SECP, Financial Supervision Unit, FBR and law enforcement agencies, including timely and secure sharing of supervisory and enforcement information. Market participants need to know who regulates what, what requires licensing, and what risks trigger banking, tax, or anti-money laundering oversight.
The UK offers another lesson: consumer protection must begin before a product is sold. Crypto damage rarely starts with the code. It starts with advertising, influencers, fake success stories and the promise of a lucky trade. The law addresses this problem directly. No one may advertise or market a virtual asset unless the issuer holds a valid license and all marketing materials must contain the prescribed risk information. It’s the right instinct. Pakistan now needs enforcement capabilities to match its words.
The UAE shows that clear rules can attract serious business, but overlapping regulations can lead to confusion in the market. Pakistan should make PVARA the frontline regulator, with clear protocols on when the State Bank, SECP, FMU or FBR should intervene. There is, however, a structural tension worth monitoring. The president is appointed by the federal government, which also retains the power to give policy directives to the PVARA. Operational autonomy is promised in the Act, but the promises require an institutional culture to keep them.
Singapore views digital assets as part of a broader fintech strategy, not a standalone crypto experiment. Pakistan should follow this instinct. Virtual assets must be placed alongside payment systems, cybersecurity, data protection and formal funds transfer channels. Cryptography alone will not modernize an economy dependent on cash, informal transfers and weak documentation.
Stablecoins require special attention. The law appears to set the bar correctly: fiat-referenced tokens must be 100% backed by high-quality liquid assets held in a separate reserve, redeemable at par without undue delay, with audited information and strict AML compliance. For Pakistan, remittances are used to pay for school fees, rent, medicine and groceries. The reserve requirement is not a bureaucratic prudence. This is the difference between a real payment instrument and a bet dressed up as one.
Mining is sensitive. The law wisely excludes pure mining from licensing, but subjects operations involving client assets to comprehensive regulation. If mining is allowed on a large scale, there should be no hidden subsidies or diversion of electricity from productive use. This battle will take place outside the PVARA mandate, but Pakistan cannot afford to lose it. The license must mean something. The law requires licensees to hold customer assets in entirely segregated accounts and prohibits pledging such assets without the express, informed, revocable written consent of the customer. This provision exists because trade is collapsing. Customer money must survive even when the platform does not. The tax treatment remains to be defined in practice, with the role of the FBR likely to be crucial.
Success won’t be measured by licensed scholarships, glossy conferences, or trendy startups. This will be measured by whether ordinary Pakistanis are protected from anonymous operators, offshore scams and traps set by influencers.
The test of cryptography in Pakistan is not whether it can appear modern, but whether it can govern modernity. In finance, technology evolves. Trust remains the oldest currency.
The writer is a superior court attorney and holds an LLM from the Carey Law School of the University of Pennsylvania.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the editorial policies of PK Press Club.tv.
Originally published in The News
