Pakistan is the world’s third-largest cryptocurrency market by user count. The Virtual Assets Act, 2026 has converted that informal economy into a licensed jurisdiction with statutory enforcement. This guide explains the commercial opportunity, the licensing pathway, and the capital and timing requirements as PVARA has published them.
The Commercial Case for Pakistan
If the first thing you read about a regulatory regime is the regulator, you are reading in the wrong order. The first question for any commercial operator is whether the market justifies the licensing cost. For Pakistan, the answer is one of the strongest in the global crypto landscape — which is why Binance and HTX were reported in December 2025 to have received No Objection Certificates from PVARA.
Four structural features make Pakistan commercially distinctive among emerging crypto markets, and each of them maps directly to a revenue line that licensed VASPs can address but unlicensed operators cannot.
1. A USD 30+ billion remittance corridor
Pakistan receives more than USD 30 billion annually in formal remittances, with the largest single corridor being the United Arab Emirates, followed by Saudi Arabia, the United Kingdom, the United States, and Bahrain. A meaningful and growing portion of these flows already happens via crypto rails — Pakistan is consistently among the top countries globally for stablecoin-denominated remittance volume — but the infrastructure facilitating those flows is currently unlicensed and operates in legal grey space. PVARA-licensed VASPs are the first entities able to capture this remittance volume legitimately, with bank-grade fiat on-ramps and off-ramps, full FATF Travel Rule compliance, and the ability to partner with the Pakistani banking system on regulated remittance products. The unit economics on remittance crypto are well understood — fees of 1–2% versus 4–8% for traditional bank wires — and Pakistan represents one of the largest concentrated opportunities for that margin globally.
2. A hundred million unbanked adults
Approximately 100 million Pakistani adults are excluded from traditional banking infrastructure. For most categories of financial services, this is a problem. For licensed virtual asset service providers, it is a structurally protected addressable market that cannot be served by conventional banks and that conventional fintech has been unable to fully reach. Wallet products, stablecoin-denominated savings, on-chain credit, and tokenised microfinance products all become commercially viable at scale only inside a regulated framework. PVARA’s licence categories — including payments-style transfer and settlement, custody, and token issuance — are the route by which licensed operators can address this market.
3. A currency that has lost over 50% of its value in five years
The Pakistani rupee has depreciated more than 50% against the US dollar since 2019, with a 28% drop in 2023 alone. Pakistani retail and institutional capital has demonstrably responded by allocating to dollar-denominated stablecoins as a value-preservation strategy. This is not speculative trading — it is structural demand for USD exposure that the Pakistani banking system cannot legally provide at scale to retail customers and that crypto rails can. Licensed stablecoin issuers and exchange operators offering USDT and USDC have a structurally protected commercial position serving this demand. This is not a discretionary product line — it is the single largest demand-side flow in the Pakistani crypto market.
4. A government that has reversed position and is now actively recruiting capital
Until late 2024, the official Pakistani policy position was that cryptocurrency would never be legal. That position has been comprehensively reversed. The Pakistan Crypto Council was established with high-level government participation. The Prime Minister has personally convened meetings on Bitcoin mining and asset tokenisation. The Virtual Assets Ordinance was promulgated in July 2025 and converted into permanent primary legislation by the National Assembly in March 2026. PVARA has been given statutory enforcement powers including criminal penalties for unlicensed operation. The strategic posture is unambiguous: Pakistan is seeking to attract licensed VASP capital.
Who Pakistan Is For: Four Client Profiles That Fit
The PVARA regime is not a generic licensing regime that fits every commercial model. Esquare Legal’s practice is to assess fit early, before substantive licensing work begins, so that applicants do not invest months in a pathway that does not match their commercial model. Four operator profiles fit Pakistan well.
Profile 1: Tier-1 and Tier-2 global exchanges expanding into South Asia
Global exchanges with existing licences in major jurisdictions — VARA in the UAE, MAS in Singapore, MiCA in the European Union, or comparable — and a strategic interest in Pakistani retail and institutional volume. The commercial case is direct user acquisition into a 27-million-user market that competitors have not yet locked down. The operational case is that the existing infrastructure (matching engines, custody, AML systems) can be adapted for Pakistan rather than built from scratch. A foreign licence is not a PVARA condition, but the track record it evidences is relevant to the business plan and fit-and-proper material.
Profile 2: Stablecoin issuers and PSP-style payment operators
Stablecoin issuers — particularly USD-pegged and EUR-pegged tokens — addressing the demonstrated structural demand for value-preservation and remittance use cases in Pakistan. Payment service providers offering crypto-fiat on/off-ramps integrated with Pakistani banking infrastructure are a closely adjacent category. The commercial case is the remittance corridor combined with the unbanked addressable market; the operational case is that the regulatory framework contemplates fiat-referenced and asset-referenced token issuance as licensed activities from day one rather than retrofitting them onto a securities or e-money regime.
Profile 3: Custodians and institutional infrastructure providers
Institutional custodians serving family offices, asset managers, treasury operations, and corporate clients with Pakistani exposure or Pakistani-domiciled beneficial ownership. The Pakistani institutional market is currently underserved at the custody layer — domestic institutional crypto allocation is real and growing but is largely being held in foreign custody arrangements that create regulatory and tax complexity. A PVARA-licensed custodian can serve this client base from inside Pakistan with full local regulatory standing. This category also includes specialist infrastructure providers — wallet-as-a-service operators, on-chain compliance providers, and treasury management platforms — that serve other licensed VASPs as upstream service providers.
Profile 4: Token issuers raising capital into a regulated framework
Token issuers — particularly those issuing asset-referenced tokens, fund tokens, or commodity-backed tokens — for whom a clearly regulated Pakistani offering is preferable to operating in regulatory ambiguity or in higher-cost jurisdictions. The Pakistani framework treats token issuance as a licensed activity, and the capital-raising environment is favourable for issuers willing to go through proper licensing rather than relying on unregulated offerings.
What a PVARA Licence Actually Gives You
Regulatory permissions are not commercial outcomes. The licensing process is capital-intensive; the right way to think about it is as an investment that purchases specific commercial entitlements that are unavailable to unlicensed operators. Four entitlements matter most.
First, legal access to approximately 27 million existing crypto users in Pakistan and the substantially larger universe of users who will enter the market as the regulated infrastructure matures. Wilfully providing an unlicensed virtual asset service is an offence punishable by imprisonment for up to five years, a fine of up to PKR 50 million, or both (Virtual Assets Act, 2026, s.54(1)), which means that competitors who serve Pakistani users without a licence are taking enforcement risk that licensed operators are not.
Second, standing to register with the Financial Monitoring Unit and to integrate with the Pakistani banking system for fiat on-ramps and off-ramps. The Pakistani banking system has been substantively unwilling to facilitate transactions for unlicensed crypto operators since 2018. PVARA licensing is the gateway that re-opens that integration. Without it, every Pakistani-facing operation is structurally limited to peer-to-peer rails and informal liquidity, which caps the addressable market and the average revenue per user.
Third, eligibility to bid for institutional and government-related mandates. The State Bank of Pakistan and various federal entities have signalled intent to procure licensed crypto services for specific functions — including remittance facilitation, tokenisation of government assets, and integration with the Digital Pakistan Authority’s initiatives. These mandates will be available only to PVARA-licensed entities.
Fourth, banking relationships, payment processor integrations, and corporate counterparty access in Pakistan that are conditional on PVARA authorisation. The commercial reality of operating in Pakistan as a financial services entity is that the entire institutional counterparty ecosystem — banks, payment processors, telco partners, audit firms, and major corporates — uses regulatory authorisation as a baseline counterparty filter. PVARA licensing is the credential that opens those relationships.
The Regulatory Framework: What the Virtual Assets Act, 2026 Actually Says
Statutory architecture
The Virtual Assets Act, 2026 (“the Act”) is the primary federal legislation governing the issuance, custody, exchange, transfer, brokerage, and management of virtual assets in or from Pakistan. The Act replaces the Virtual Assets Ordinance, 2025 and provides PVARA with a complete statutory basis to operate as a permanent regulator with property-holding powers, contracting powers, and enforcement authority including the power to issue, suspend, and revoke licences.
The Act defines a virtual asset as a digital representation of value that can be digitally traded or transferred and used for payment or investment purposes, excluding fiat currencies, securities already regulated under the Securities Act, 2015, and digital representations of fiat currency. This definition covers cryptocurrencies, stablecoins, asset-referenced tokens, utility tokens, non-fungible tokens used as investments, and most categories of synthetic digital instrument. It does not cover central bank digital currencies, which are governed separately under the State Bank of Pakistan’s monetary authority.
PVARA’s governance structure reflects the cross-cutting nature of virtual asset regulation. The Authority’s board includes senior representatives from the State Bank of Pakistan, the Ministry of Finance, the Ministry of Law and Justice, the Ministry of Information Technology and Telecommunication, the Securities and Exchange Commission of Pakistan (SECP), the Federal Board of Revenue (FBR), and the Digital Pakistan Authority, together with two independent experts in relevant fields. This composition matters because it tells applicants that PVARA decisions reflect a coordinated federal view across banking, securities, taxation, and digital infrastructure policy.
The AML/CFT layer and FATF context
The Act ties licensed VASPs to the Anti-Money Laundering Act, 2010 and to Pakistan’s obligations under the Financial Action Task Force (FATF) framework. Pakistan exited the FATF grey list in October 2022 and has been working since then to demonstrate sustained compliance with the FATF’s Recommendation 15 on virtual assets. PVARA’s establishment is a direct response to that obligation. Licensees should expect to register with the Financial Monitoring Unit (FMU), implement risk-based customer due diligence, maintain transaction monitoring systems, and file suspicious transaction reports.
FATF Recommendation 16 (the Travel Rule) is the international standard against which Pakistani VASP controls will be assessed. For exchanges already complying with the Travel Rule in jurisdictions like the UAE under VARA or in the European Union under the Transfer of Funds Regulation, this is not new infrastructure — it is an additional Pakistan-specific reporting line. For exchanges that operate primarily in jurisdictions without active Travel Rule enforcement, this is a meaningful operational lift.
Who Needs a PVARA Licence (and Who Does Not)
A licence authorises only the categories named in it. Schedule I to the Act sets out eleven licence categories: Advisory Services; Broker-Dealer Services; Custody Services; Exchange Services; Lending and Borrowing Services; Virtual Asset Derivatives Services; Virtual Asset Management and Investment Services; Virtual Asset Transfer and Settlement Services; Fiat-Referenced Token Issuance Services; Asset-Referenced Token Issuance Services; and Mining Related Virtual Asset Services. An applicant may apply for one or more. A licensee may not rely on one category to carry on an activity that falls in another, and a product that combines features of more than one category needs a licence for that activity (Services Regulations 4–5; Activity Specific Regulations, General Regulations 2). Pure mining that involves no customer assets or third-party services is not itself a licensed Virtual Asset Service (Act s.37(2)); mining operations that do involve them are.
Token issuers are explicitly within scope. Any natural or legal person offering, marketing, or distributing a virtual asset in Pakistan must either be licensed or operate through a licensed VASP. This captures stablecoin issuers, project foundations conducting public sales, and any platform offering yield-bearing tokens, fund tokens, or asset-referenced tokens.
Foreign VASP applicability
The Services Regulations apply to Virtual Asset Services carried on in or from Pakistan. An activity may be treated as carried on in Pakistan where it targets, solicits, promotes to or onboards persons in Pakistan, including through marketing on a website or app, payment rails, provision of services in PKR, or channels accessible to persons in Pakistan (Reg 3(4)). A website or app is not, of itself, treated as carried on in Pakistan merely because it can be reached there, if the operator does not market or solicit in Pakistan, does not onboard persons in Pakistan, does not support PKR rails or Pakistan-targeted channels, and takes reasonable steps to prevent onboarding where it does not intend to serve Pakistan. PVARA may still determine otherwise on recorded, reasoned grounds (Reg 3(5)).
A person providing Virtual Asset Services in Pakistan must be a company incorporated in Pakistan under the Companies Act, 2017, holding a licence for the relevant category (Reg 5(1)). An operator outside Pakistan that wishes to serve Pakistani users therefore either incorporates a Pakistani licensee or restricts its offering so that it falls outside Reg 3(4). Binance and HTX were reported in December 2025 to have received NOCs from PVARA.
What is not regulated
Peer-to-peer transactions between natural persons, where neither party is acting as a business, are not within PVARA’s scope. Pure software providers that do not custody assets or facilitate transactions — wallet software developers, blockchain analytics firms, smart contract auditors — are not VASPs under the Act. Decentralised protocols that operate without any identifiable controlling party present harder questions and are likely to be addressed in subsequent PVARA rulemaking; for now, the practical risk for protocol developers is that PVARA may treat governance token holders or front-end operators as VASPs by attribution. Anyone designing a DeFi protocol intended to be accessible from Pakistan should obtain a regulatory opinion before launch.
The Licensing Process: From NOC to Operational Licence
Licensing runs in three steps under the Services Regulations, 2026.
Step 1: No-Objection Certificate (Reg 6)
A person intending to establish a company in Pakistan applies on Form I with the documents in its Annexure: applicant and board details, capital and liquidity attestation, a business plan with three-year projections including stress scenarios, the intended custody model, the jurisdictional delivery model (channels, geo-targeting and geo-blocking controls, group entities and outsourcing), and the fit-and-proper information for sponsors, the chief executive and directors. PVARA decides a complete application within 60 days, either granting an NOC with conditions or refusing with written reasons. An NOC is valid for three months and may be extended once by up to three months. It is not a licence and does not allow any service to be provided.
Step 2: incorporation and FMU registration
After the NOC, the applicant incorporates the Pakistani company under the Companies Act, 2017 (minimum three directors; 100% foreign shareholding is permitted) and completes registration with the Financial Monitoring Unit.
Step 3: licence application (Reg 7)
Within the NOC’s validity, the company applies for one or more licence categories with the updated Form I documents and the non-refundable processing fee. An application is complete only when PVARA confirms in writing that it has everything it needs, and the clock stops while PVARA waits for further information. PVARA decides within 90 days of completeness, extendable by up to 60 days for complex applications. Director and managing-director appointments need PVARA approval before they take office; PVARA must decide within 30 business days of a complete request.
Local presence (Reg 10(4)). A licensee must keep a registered office in Pakistan and at least one key individual resident in Pakistan with operational and decision-making authority who is accountable to PVARA for compliance.
Because both statutory periods run only from PVARA’s confirmation that an application is complete, elapsed time depends mainly on how quickly the file is made complete.
Minimum paid-up capital by licence category (Services Regulations, Schedule I)
| Licence category | Minimum paid-up capital (PKR) |
|---|---|
| Advisory Services | 15,000,000 |
| Broker-Dealer Services | 75,000,000 |
| Custody Services | 200,000,000 |
| Virtual Asset Management and Investment Services | 200,000,000 |
| Virtual Asset Transfer and Settlement Services | 200,000,000 |
| Fiat-Referenced Token Issuance Services | 300,000,000 |
| Asset-Referenced Token Issuance Services | 300,000,000 |
| Exchange Services | 500,000,000 |
| Lending and Borrowing Services | 500,000,000 |
| Virtual Asset Derivatives Services | 500,000,000 |
| Mining Related Virtual Asset Services | 500,000,000 |
Capital must be maintained at all times (Reg 10(3)). In every case the applicant is a Pakistani company with at least three directors. PVARA’s processing, licensing, annual supervisory and renewal fees are to be published in the Rules (Reg 11); processing fees are non-refundable.
The Regulatory Sandbox
PVARA operates a Regulatory Sandbox for innovative virtual asset products to be tested under supervision within an agreed scope, duration and customer limits, with reporting, safeguarding and disclosure requirements throughout. PVARA publishes its sandbox guidelines on its Legal Framework page. A sandbox participant that completes testing to PVARA’s satisfaction may apply directly for a licence and does not need a separate NOC (Reg 7(6)); participation creates no entitlement to a licence. An applicant that already holds an NOC, or has applied under the NOC Regulations, 2025, may apply for the licence directly (Reg 7(7)). The sandbox suits products that do not map cleanly onto the licence categories. It is not a shortcut for an exchange, custody or token-issuance business that fits an existing category.
Strategic Considerations: Corridors and Regulators
Pakistan’s real crypto corridors
Pakistan is not a standalone market — it is one node in three substantive cross-border crypto and financial corridors, and the strategic value of a PVARA licence depends partly on which corridor the applicant primarily serves.
The largest by volume is the Pakistan–UAE and broader Pakistan–Gulf corridor. Pakistan has approximately 1.7 million diaspora residents in the UAE and substantial communities in Saudi Arabia, Bahrain, and Qatar. The remittance flow alone exceeds USD 30 billion annually, with the UAE-Pakistan corridor representing the single largest component. Crypto rails — particularly stablecoin-denominated transfers — are already capturing a growing share of this flow informally. Licensed VASPs operating on both sides of the corridor (a VARA licence in the UAE paired with a PVARA licence in Pakistan) are uniquely positioned to capture this flow legitimately, with bank-grade integration, full Travel Rule compliance, and the ability to offer remittance products on terms that informal operators cannot match. For exchanges and PSPs already licensed in the UAE, Pakistan is the natural second-jurisdiction expansion.
The strategic corridor is Pakistan–China. The China-Pakistan Economic Corridor (CPEC) under the Belt and Road Initiative has channelled approximately USD 62 billion in announced Chinese investment into Pakistani infrastructure over the past decade, and the broader China-Pakistan economic relationship is one of the most consequential bilateral economic alignments in Asia. Tokenisation of CPEC-related assets, on-chain trade finance for Pakistan-China commerce, and yuan-denominated stablecoin infrastructure for the corridor are all active areas of commercial interest. For operators with existing China presence — whether direct Chinese operations or partnerships with Chinese counterparties — Pakistan offers a regulated entry point into a strategic corridor with significant institutional and government-backed demand.
The institutional corridor is Pakistan–Singapore and Pakistan–Hong Kong. The major exchanges and institutional crypto infrastructure providers seeking PVARA licences are predominantly domiciled in Singapore (MAS-licensed) or Hong Kong (SFC-licensed). For these operators, Pakistan represents a high-growth market addressable through a corridor that already has well-established legal, banking, and operational connectivity. Singapore and Hong Kong institutional capital flowing into Pakistani crypto operations — whether equity investment in licensed VASPs, debt facilities, or operational partnerships — is the most likely funding pathway for the Pakistani VASP sector over the next 24 months.
The SECP and SBP interface
PVARA is the lead regulator for virtual assets, but it does not operate in isolation. Three other regulators have material touch points with any meaningful crypto operation in Pakistan.
The Securities and Exchange Commission of Pakistan (SECP) regulates securities and certain structured products. Where a token has the economic characteristics of a security — typical of tokenised equity, profit-sharing arrangements, or certain debt-like instruments — SECP’s jurisdiction is engaged in parallel with PVARA’s. The boundary is not always clear, and applicants offering products that could be characterised either way should obtain regulatory opinions from both regulators before launch. SECP’s general approach has been to treat anything that meets the Howey-style test (investment of money, common enterprise, expectation of profits, derived from the efforts of others) as a security regardless of its technical packaging as a token.
The State Bank of Pakistan (SBP) regulates payments, foreign exchange, and the broader monetary infrastructure. Virtual assets may not be used as a means of payment for domestic commercial transactions unless the State Bank specifically approves it (Services Regulations, Reg 3(6)). Products that function as payment instruments — stablecoins used for remittances, on-ramp services that convert PKR to virtual assets at scale, and any product touching the foreign exchange regime — require SBP coordination. The Pakistani Foreign Exchange Regulation Act, 1947 (FERA) remains in force and contains provisions on cross-border value movements that intersect with virtual asset activity.
The Federal Board of Revenue (FBR) governs taxation. Virtual asset gains by Pakistani residents are taxable, and licensed VASPs will become information reporting agents under emerging CARF-aligned (Crypto-Asset Reporting Framework) rules. International applicants should not assume the favourable tax treatment of virtual assets in some jurisdictions translates to Pakistan.
Common Pitfalls and How to Avoid Them
The most common reason applicants fail at the NOC stage is not technical defect in the documentation — it is misalignment between the applicant’s commercial intent and what the Pakistani regime is designed to accommodate. PVARA is not seeking to attract speculative casino-style trading platforms or yield-aggregation protocols of uncertain economic substance. Applicants whose business model is in tension with that strategic intent will find the application process correspondingly difficult.
The second most common pitfall is the assumption that prior authorisation in another jurisdiction will reduce the Pakistani evidential burden. Neither the Regulations nor PVARA’s published FAQ provide for recognition of foreign licences. A VARA, MAS or MiCA licence is relevant evidence of track record, but the application is a full assessment of the applicant’s Pakistani operations. Applicants must demonstrate that they have engineered their Pakistani business specifically for the Pakistani regime, not that they have replicated their UAE or Singapore operations.
The third pitfall is timing. Applicants often submit before they have the Pakistani governance in place that PVARA will test at licence stage: the proposed directors and key individual, a draft Pakistani AML/CFT manual, and the custody and delivery-model information Form I asks for. The NOC does not require the company to exist yet, but the licence application must follow incorporation within the NOC’s validity period, so the Pakistani build-out has to be planned from the start.
The fourth pitfall is shareholder structure opacity. PVARA looks through to ultimate beneficial owners and conducts substantive fit-and-proper assessments. Holding structures designed for tax efficiency in other jurisdictions but that obscure ownership lines will be flagged. Applicants should expect to provide complete ownership chains and to demonstrate that no controlling person has an adverse regulatory or criminal history in any jurisdiction.
How Esquare Legal Advises on PVARA Licensing
Esquare Legal is one of a small number of firms with the combination of Pakistani-licensed practitioners, international regulatory experience, and direct commercial experience working with cross-border crypto-native clients required to advise on PVARA licensing competently. We are not a Pakistani domestic law firm that has added a crypto practice — we are a crypto-native firm that operates in Pakistan as part of a multi-jurisdictional practice spanning the United Arab Emirates, Brazil, Pakistan, and China.
Our managing partner is a Barrister with regulatory engagements across virtual asset and fintech licensing authorities in the UAE (VARA), Bahrain (CBB), Brazil (BCB), Indonesia, Malaysia, the BVI, and the Cayman Islands, supported by a team of eight Pakistani-licensed associates and a Junior Partner leading our China practice. We hold the registered Pakistani entity and licensing relationships that make on-the-ground PVARA work possible. We also operate as Registered Partners of Tahota Law Firm — a top-100 global firm with substantial China operations — which gives clients moving between the China-Pakistan and Gulf-Pakistan corridors integrated cross-border representation that boutiques without these partnerships cannot match.
Our PVARA practice spans the full lifecycle of a licensing engagement, including pre-application regulatory strategy and feasibility assessment; corporate structuring of the Pakistani entity and its relationship to the applicant’s existing group, including coordination with UAE, Singapore, Hong Kong, and EU group entities; drafting and submission of the NOC application and supporting documentation; SECP and SBP coordination where the applicant’s product portfolio engages parallel regulatory regimes; engagement with PVARA’s Regulatory Sandbox for novel product structures; post-licensing compliance support including ongoing AML reporting and supervisory engagement; and cross-border structuring of intra-group service arrangements, custody chains, and liquidity flows to satisfy PVARA, the home regulator, and FATF obligations simultaneously.
Our engagement structures are designed for international applicants. We work on fixed-fee engagement letters for defined licensing scopes, hybrid fee structures combining fixed fees with success-based milestones for sandbox engagements, and retainer-based fractional general counsel arrangements for clients requiring ongoing PVARA-side compliance support beyond the licensing phase.
Next Steps
If you are evaluating PVARA licensing as part of a commercial strategy for the Pakistani market or for a broader cross-border crypto operation, the most efficient first step is a structured feasibility call with our Pakistan regulatory team. The call covers your commercial model and whether Pakistan fits, the licence category most appropriate for your operations, an indicative timeline and cost estimate, and the corridor and counterparty considerations relevant to your specific group structure.
For the detailed regulatory analysis behind this guide, see our 29-point submission to PVARA on the draft Virtual Asset Services Regulations 2026, benchmarked against MiCA, VARA, MAS, and FATF standards.
Companion resources for prospective applicants include our PVARA Application Readiness Checklist (a structured 20-point review of the documentation and operational steps required before formal NOC submission) and our PVARA Capital Structuring Memo (an analysis of the capital floor implications across the principal licence categories). Both are available on request to qualified prospective applicants.
Frequently Asked Questions
What is the minimum paid-up capital for a PVARA licence?
It depends on the licence category. Schedule I to the Pakistan Virtual Asset Services Regulations, 2026 sets PKR 15 million for Advisory Services; PKR 75 million for Broker-Dealer Services; PKR 200 million for Custody, Virtual Asset Management and Investment, and Virtual Asset Transfer and Settlement Services; PKR 300 million for each of Fiat-Referenced and Asset-Referenced Token Issuance Services; and PKR 500 million for Exchange, Lending and Borrowing, Virtual Asset Derivatives and Mining Related Virtual Asset Services. The licensee must be a Pakistani company with at least three directors and must maintain the capital at all times.
What are the steps to getting a PVARA licence?
There are three steps. First, apply to PVARA for a No-Objection Certificate (NOC) on Form I. Second, after the NOC is granted, incorporate the Pakistani company and register with the Financial Monitoring Unit. Third, within the NOC’s validity period, apply for one or more licence categories with the updated Form I documents and the non-refundable processing fee. Sandbox participants who complete testing successfully may apply for a licence directly without an NOC.
How long does a PVARA application take?
PVARA must decide a complete NOC application within 60 days. An NOC is valid for three months and can be extended once by up to three months. PVARA must decide a complete licence application within 90 days, extendable by up to 60 days for complex applications. An application counts as complete only when PVARA confirms in writing that it has all required information, and the time stops running while PVARA waits for further information, so actual elapsed time depends mainly on how quickly the file is completed.
Do I need a Pakistani company before I apply for an NOC?
No. The NOC is for a person intending to establish a company in Pakistan for the purpose of applying for a licence. The company is incorporated after the NOC is granted, and the licence application must follow incorporation within the NOC’s validity period. Foreign ownership of up to 100% is permitted, but the licensee must be a company incorporated under the Companies Act, 2017 with at least three directors, a registered office in Pakistan, and at least one key individual resident in Pakistan.
What licence categories does PVARA issue?
Eleven: Advisory Services; Broker-Dealer Services; Custody Services; Exchange Services; Lending and Borrowing Services; Virtual Asset Derivatives Services; Virtual Asset Management and Investment Services; Virtual Asset Transfer and Settlement Services; Fiat-Referenced Token Issuance Services; Asset-Referenced Token Issuance Services; and Mining Related Virtual Asset Services. A licence covers only the categories named in it, and an applicant may apply for more than one.
Do foreign exchanges need a PVARA licence to serve Pakistani users?
Yes, if they carry on the activity in or from Pakistan. Under Regulation 3(4) of the Services Regulations, an activity may be treated as carried on in Pakistan where it targets, solicits, promotes to or onboards persons in Pakistan, including through marketing, payment rails or services in PKR. A site that is merely accessible from Pakistan is not caught if the operator does not market or solicit there, does not onboard Pakistani persons, does not support PKR rails or Pakistan-targeted channels, and takes reasonable steps to prevent onboarding. Wilfully providing an unlicensed virtual asset service is an offence punishable by imprisonment for up to five years, a fine of up to PKR 50 million, or both (Virtual Assets Act, 2026, section 54(1)).
What was the 5 September 2026 deadline?
Under section 70 of the Virtual Assets Act, 2026 and PVARA advisory PVARA/ADV/001/2026, persons who were providing virtual asset services on or before 5 March 2026 had to submit an NOC application by 5 September 2026 or cease operating. That date has passed. Other persons may apply for the Regulatory Sandbox or an NOC when they meet the requirements.
Does PVARA recognise an existing VARA, MAS or MiCA licence?
The Regulations and PVARA’s published FAQ do not provide for recognition of foreign licences, and do not make a foreign licence a condition of the NOC. A licence from another regulator is relevant evidence of track record in the business plan and fit-and-proper material, but the Pakistani application is assessed in full on its own terms.
How do SECP and the State Bank of Pakistan fit in?
PVARA is the lead regulator for virtual assets. The Securities and Exchange Commission of Pakistan retains jurisdiction over tokens that are securities, which can require parallel authorisation. The State Bank of Pakistan regulates payments and foreign exchange; virtual assets may not be used as a means of payment for domestic commercial transactions unless the State Bank specifically approves it (Services Regulations, Reg 3(6)). Products that cross these boundaries need coordinated engagement with each regulator.
Does a sandbox participant also need an NOC?
No. A participant that completes sandbox testing to PVARA’s satisfaction may apply directly for a licence under Regulation 7 and does not need a separate NOC. Participation creates no entitlement to a licence, and the applicant must still meet every applicable requirement.
This guide reflects the state of Pakistani virtual asset regulation as of 8 October 2026. The Virtual Assets Act, 2026 and subordinate rulemaking continue to evolve. This guide is general legal information and is not legal advice. Clients should obtain specific legal advice on their particular circumstances before taking any action in reliance on the content herein.