The Central Bank of Pakistan has legalized cryptocurrency in Pakistan.Image Credit source: Google Gemini
The Central Bank of Pakistan has legalized the use of virtual assets – including cryptocurrencies – by introducing the ‘Virtual Assets Act 2026’. This is one of the biggest changes in the digital financial sector of the country in recent years. Under this new law, the State Bank of Pakistan has created ‘Pakistan Virtual Asset Regulatory Authority’ (PVARA). It is a statutory body that will be responsible for licensing, regulating, monitoring and supervising all activities related to virtual assets in the country. A circular has also been issued by the Central Bank of Pakistan. Let us also tell you what is included in this circular.
Central Bank issued circular
A circular issued by the central bank on Tuesday said that entities regulated by SBP (REs) can open bank accounts of entities duly licensed by PVARA as ‘Virtual Asset Service Providers’ (VASPs) subject to strict compliance with the conditions set out herein. It was also said that these new instructions will come into effect immediately. This move essentially creates the first formal legal framework for businesses related to cryptocurrency and digital assets in Pakistan.
Earlier the rules were quite strict
PVARA has now formally legalized the use and transactions of digital currency assets in Pakistan, by Pakistanis living abroad, and in export-import business. Previously, Pakistan had a very strict stance towards cryptocurrencies and digital assets, and banking channels were mostly closed to such businesses. This new regulation means that now licensed cryptocurrency exchanges, wallet providers, digital asset platforms and their associated fintech companies will be able to use the formal banking system of Pakistan.
