Pakistan Opens Doors to Global Crypto Firms With New Licensing Regime, Citing High Adoption

Pakistan Opens Doors to Global Crypto Firms With New Licensing Regime, Citing High Adoption

In a landmark move to formalize its rapidly growing digital asset sector, Pakistan has officially invited international cryptocurrency exchanges and virtual asset service providers (VASPs) to apply for operating licenses. The newly established Pakistan Virtual Asset Regulatory Authority (PVARA) is spearheading the initiative, signaling a decisive policy shift aimed at integrating one of the world’s highest-adoption crypto markets into the global regulatory framework.

A High Bar for Entry

Pakistan is deliberately targeting established and well-regulated players to build its domestic crypto ecosystem. Eligibility for a license is restricted to firms that are already licensed by a recognized international regulator. The government specifically named the U.S. Securities and Exchange Commission (SEC), the UK’s Financial Conduct Authority (FCA), and regulatory bodies in the European Union, the United Arab Emirates, and Singapore as qualifying jurisdictions.

Applicants must submit comprehensive Expressions of Interest (EoIs) detailing their existing licenses, compliance track records, security standards, and a business model tailored for the Pakistani market. “This EoI is our invitation to the world’s leading VASPs to partner in building a transparent and inclusive digital financial future for Pakistan,” said Bilal bin Saqib, the chair of PVARA.

Balancing Regulation with Innovation

The new regulatory framework, established under the Virtual Assets Ordinance 2025, is designed to achieve two primary goals: curb illicit finance by adhering to standards set by the Financial Action Task Force (FATF) and the IMF, and foster innovation. The government has indicated that it aims to unlock opportunities in fintech, international remittances, and asset tokenization, specifically mentioning the potential for developing Shariah-compliant products within a regulatory sandbox.

A Top-Tier Market with Potential Headwinds

The strategic push for regulation comes as Pakistan emerges as a global crypto hotspot. The country surged six spots to claim 3rd place in Chainalysis’ 2025 Global Crypto Adoption Index, making it a highly attractive market for expansion. This licensing drive follows other pro-crypto government initiatives, including plans for a strategic Bitcoin reserve and the allocation of 2,000 megawatts of surplus electricity for Bitcoin mining and AI data centers.

However, this pro-growth stance is not without challenges. In July, the International Monetary Fund (IMF) voiced concerns over Pakistan’s plans to use its energy surplus for crypto mining, particularly regarding potential subsidies. This highlights a potential point of friction between the country’s domestic growth ambitions and the expectations of international financial institutions. The success of this new licensing regime will depend on how effectively Pakistan can balance these competing interests while attracting the high-quality global players it seeks.