By Qudsia Bano

Pakistan's efforts to formally regulate its estimated $300 billion virtual asset market are entering a crucial phase. Binance's progress through the country's licensing framework will serve as the first major test for the country's new supervisory regime.

The State Bank of Pakistan (SBP) in April replaced its 2018 prohibition and allowed regulated banks to open accounts for virtual asset service providers (VASPs) licensed by the Pakistan Virtual Assets Regulatory Authority (PVARA). Banks must independently verify licences, maintain segregated rupee-denominated client-money accounts and prevent the commingling of customer and company funds. Firms holding only a no-objection certificate (NOC) may receive limited-purpose accounts, while banks themselves remain prohibited from investing in or holding virtual assets.

Within that framework, Binance announced that it had secured anti-money-laundering registration with PVARA and was progressing towards full VASP licensing and local incorporation. The Ministry of Finance also confirmed in April that Binance and other service providers had received NOCs, allowing them to move through the regulatory process. However, these approvals do not constitute full operating licences.

The market potential is substantial. The Ministry of Finance estimated in September 2025 that Pakistan had more than 40 million virtual asset users, with annual trading volumes exceeding $300 billion. At an industry briefing on April 30, PVARA also highlighted annual remittances of $38.3 billion and more than 100 million adults outside the formal financial system, arguing that digital assets should be viewed as part of the country's future financial infrastructure.

At the same time, regulators have stressed that innovation must remain within the legal framework. In an advisory issued on April 26, PVARA said pilots, partnerships and memoranda involving stablecoins, cross-border payments, tokenisation, custody, exchange or transfer services require prior regulatory approval. It warned that premature announcements could create regulatory, reputational and Financial Action Task Force (FATF) compliance risks.

The government has also begun exploring state-backed applications of blockchain technology. In May, the finance minister and the PVARA chairman discussed tokenising sovereign debt instruments and Naya Pakistan Certificates, including regulated blockchain issuance and same-day settlement. The government noted that Roshan Digital Account inflows had approached $13 billion since 2020 and that tokenised financial instruments could complement the existing overseas investment platform. It added that further approvals and coordination among the Ministry of Finance, PVARA and the SBP would be required before implementation.

An IMF staff report, hosted by the Ministry of Finance in the same month, noted that Parliament's March 2026 legislation had formally established PVARA but said Pakistan still needed comprehensive secondary regulations to align its virtual asset framework with international standards. The report also stressed that virtual asset integration should remain consistent with broader macro-financial policies.

Industry stakeholders believe the new framework could create significant commercial opportunities if supported by clear and enforceable regulations.

Raza Ali, Operations Executive at JazzCash, said the company aimed to expand into asset fractionalisation and broaden access to digital assets. JazzCash reported 60 million registered customers and gross transaction value of Rs16.8 trillion during the 12 months ending March 2026, highlighting the scale at which digital financial products could eventually be offered.

Junaid Khan, Operations Manager at Easypaisa Digital Bank, told Wealth Pakistan that PVARA and the Virtual Assets Act had provided Pakistan with its first formal legal framework for virtual assets and could enable safer, regulated digital investment.

He said trust, fraud prevention, stronger electronic know-your-customer (e-KYC) systems and robust customer protection would be essential for wider adoption of digital assets in Pakistan.

Credit: INP-WealthPk