When Pakistan launched its new crypto licensing system in July 2025, it didn’t just change the rules - it rewrote the entire playbook. For years, crypto was a legal gray zone: banned by the central bank but quietly used by millions. Now, the Pakistan Virtual Asset Regulatory Authority (an independent federal regulator created under the Virtual Assets Ordinance 2025 to oversee all virtual asset service providers in Pakistan) is the only game in town. But getting a license? It’s not easy. And it’s not for everyone.
Who Can Even Apply?
Acceptable foreign regulators include:
- U.S. Securities and Exchange Commission (SEC)
- UK Financial Conduct Authority (FCA)
- European Union’s VASP framework
- United Arab Emirates’ Virtual Assets Regulatory Authority (VARA)
- Monetary Authority of Singapore (MAS)
If you’re licensed in one of these jurisdictions, you’re on the shortlist. If you’re not? You can’t apply. No exceptions. This isn’t about protecting local businesses - it’s about filtering out bad actors. Pakistan’s history with money laundering led the Financial Action Task Force (FATF) to flag it years ago. Now, PVARA is using international credibility as a shield.
What You Need to Submit
Submitting an Expression of Interest (EoI) isn’t filling out a form. It’s preparing a dossier. PVARA expects full transparency. Your application must include:
- Complete company profile: history, ownership structure, board members
- Copies of all existing licenses with issuing authorities and dates
- Detailed breakdown of services: trading, custody, payments, staking, tokenization
- Technology stack: cybersecurity protocols, encryption standards, cold storage details
- Assets under management (AUM) and annual revenue figures
- Proven AML/CFT and KYC compliance history - with audit trails
- A clear Pakistan-specific operating model: how you’ll serve local users, handle local currency conversions, comply with tax reporting
All documents must be submitted as a single PDF. The email subject line? Exactly this: 'EoI VASP Licensing' followed by your company name. Miss the format? Your application gets rejected before anyone even reads it.
The Three-Month Wait
Don’t expect quick results. PVARA doesn’t review applications in batches. It evaluates them one by one, on a rolling basis. But even the fastest applicants face a minimum three-month wait before a decision.
Why so long? Because PVARA is doing deep due diligence. They’re checking if your KYC system can handle Pakistani ID documents. They’re verifying if your cold storage meets local data residency rules. They’re confirming your AML team has experience with Pakistan’s unique financial flows - like remittances from the Gulf.
This isn’t bureaucracy for the sake of it. It’s about avoiding repeat mistakes. In 2023, Pakistan’s banking system was flooded with illicit crypto funds. Now, every applicant is held to FATF standards. No shortcuts.
The Shariah-Compliant Edge
Pakistan isn’t just trying to attract global exchanges. It’s trying to become the hub for Islamic fintech. That’s why PVARA created regulatory sandboxes specifically for Shariah-compliant crypto products.
Think of it like this: if you’re building a crypto savings account that earns returns without interest (because interest is haram), PVARA will help you test it safely - with real users, real money, and real oversight. No other country in South Asia has done this.
Companies offering halal staking, tokenized zakat platforms, or Shariah-screened trading pairs are getting priority review. It’s not just about religion - it’s about market size. Over 96% of Pakistan’s population is Muslim. That’s a billion-dollar opportunity if done right.
The Contradiction Nobody Talks About
Here’s the messy part: PVARA says crypto is legal. The State Bank of Pakistan (SBP) says it’s not.
While PVARA issues licenses and encourages exchanges to operate, the SBP still bans banks from dealing with crypto businesses. No bank accounts. No fiat on-ramps. No direct transfers. That means even if you get licensed, you can’t legally move Pakistani rupees in or out of your exchange.
Users are stuck. They can’t deposit PKR through banks. So they use peer-to-peer (P2P) apps, crypto-to-crypto swaps, or third-party payment processors - all operating in legal limbo. This contradiction creates risk. A licensed exchange could be shut down tomorrow if the SBP cracks down.
Analysts call it a paradox. The government wants to attract investment and innovation - but won’t let the financial system support it. Until this gap closes, the licensing system feels more like a symbol than a solution.
What’s Next? Mining, CBDCs, and Political Shifts
Behind the scenes, things are shifting fast. In early 2025, the Pakistan Crypto Council announced plans to build a 2,000 MW Bitcoin mining facility using subsidized power. The idea? Turn energy waste into digital gold.
The IMF immediately pushed back. Subsidized electricity for mining? That’s a fiscal disaster waiting to happen. The plan stalled. No official update since.
Meanwhile, the Senate is moving to shift control of crypto policy from the Ministry of Finance to the Ministry of Information Technology. Why? Because digital assets aren’t about money - they’re about tech infrastructure. That change could mean faster decisions, clearer rules, and less red tape.
And then there’s the Central Bank Digital Currency (CBDC) pilot. The SBP is quietly testing its own digital rupee. If that launches, it could either compete with crypto - or work alongside it. No one knows yet.
Is It Worth It?
For big global exchanges? Maybe. If you’ve got the resources, the compliance team, and the patience, Pakistan offers a massive untapped market. Over 10 million people use crypto here - mostly for remittances and savings. And with inflation at 30%, crypto isn’t a trend. It’s a lifeline.
For small players? Probably not. The cost of compliance, the legal uncertainty, and the banking blockade make it hard to turn a profit. Most startups are waiting to see if the SBP changes its stance.
One thing’s clear: Pakistan isn’t shutting crypto down anymore. It’s trying to control it. And if it gets this right, it could become the most important crypto market in South Asia.
Can I apply for a Pakistani crypto license if I’m not licensed in the US, UK, EU, UAE, or Singapore?
No. PVARA only accepts applications from companies already licensed by one of these five regulators: SEC, FCA, EU VASP, VARA, or MAS. There are no exceptions. If you don’t have one of these licenses, you cannot apply.
How long does the entire licensing process take?
The minimum timeline is three months from submission to approval. PVARA reviews applications on a rolling basis, so there’s no fixed batch cycle. Some applicants may wait longer depending on the complexity of their business model or if additional documentation is requested.
Can I use Pakistani banks to deposit or withdraw fiat currency after getting licensed?
No. The State Bank of Pakistan still prohibits banks from providing services to crypto businesses. Even licensed exchanges cannot open bank accounts or process PKR deposits. Users must rely on P2P platforms or third-party payment processors, which operate outside the formal banking system.
Does PVARA allow Shariah-compliant crypto products?
Yes. PVARA has created regulatory sandboxes specifically for Shariah-compliant services like halal staking, tokenized zakat, and interest-free trading platforms. These applications receive priority review and are designed to serve Pakistan’s 96% Muslim population.
What happens if my application is rejected?
PVARA does not publicly disclose rejection reasons. However, applicants are typically given feedback if they request it. You can reapply after fixing the issues, but you must submit a completely new EoI with updated documentation. There is no appeals process.
Are Bitcoin mining operations allowed under the new licensing rules?
Mining is not covered under the current VASP licensing framework. While the Pakistan Crypto Council proposed a 2,000 MW mining initiative in early 2025, the plan was met with strong opposition from the IMF and remains unapproved. No licenses for mining operations have been issued as of March 2026.
Is crypto legal tender in Pakistan?
No. Cryptocurrency is not recognized as legal tender in Pakistan. The State Bank of Pakistan continues to state that digital assets are not currency and cannot be used for official payments. PVARA regulates crypto as a virtual asset - not money.
