Virtual Assets Ordinance, 2025
The Virtual Assets Ordinance, 2025 was promulgated on 8 July 2025 under Article 89(1) of the Constitution of Pakistan. The primary objective of the Ordinance is to establish a comprehensive legal regime for the licensing, regulation, and supervision of virtual assets and Virtual Asset Service Providers (VASPs), and to curb misuse of such assets for money laundering, terrorist financing, and related illicit purposes. The framework aims to promote responsible innovation, investor protection, financial inclusion, and Shariah-compliant virtual asset products in accordance with international standards.
The Ordinance applies to all VASPs and issuers conducting business in or from Pakistan. It mandates the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA), a corporate body headquartered in Islamabad with perpetual succession and the capacity to sue and be sued. The Authority comprises the Chairman, Governor State Bank, Secretaries of Finance, Law and Justice, and IT & Telecom, Chairpersons of SECP, Digital Pakistan Authority, and FBR, Director General FIA, and two independent directors.
The Authority’s functions include licensing, regulating, and supervising VASPs; safeguarding customer assets; encouraging investment; ensuring market integrity; and facilitating cooperation with SBP, SECP, FIA, FBR, the Financial Monitoring Unit, and other competent bodies. No person may provide virtual asset services without incorporation under the Companies Act 2017 and a valid license issued by the Authority. Prior to incorporation, an applicant must obtain a No-Objection Certificate from the Authority. Licensing requires submission of prescribed fees, constitutional documents, ownership details, a business plan, and particulars of controllers, directors, and key individuals who must satisfy fit and proper criteria.
Licensed VASPs must maintain a physical office in Pakistan, ensure that at least one key management person resides in Pakistan, and comply with prescribed minimum capital and capital adequacy requirements. Customer assets must be held in segregated accounts, and licensees must provide cryptographic proof of reserves reconciled with customer liabilities. In case of liquidation, customer assets remain excluded from the insolvency estate. The Authority maintains a public register of licensed entities.
The Ordinance criminalizes market manipulation relating to virtual assets and imposes obligations on VASPs to identify, manage, and disclose conflicts of interest. Licensees are required to comply with the Anti-Money Laundering Act 2010, regulations of the Financial Monitoring Unit, and FATF standards. VASPs must maintain transaction records, customer due diligence, and risk assessments for seven years, and facilitate regulatory access through secure automated interfaces.
The Authority is empowered to establish a regulatory sandbox to support controlled testing of innovative virtual asset products and services for up to eighteen months. It may issue no-action letters without granting legal immunity. The Authority may inspect premises, examine records, summon individuals, and impose penalties for contraventions, including fines up to one hundred million rupees or five percent of the virtual asset offering. Operating without a license is punishable with imprisonment of up to seven years. Making false statements in applications may result in imprisonment up to three years or a fine up to twenty million rupees.
A Virtual Assets Tribunal is established for adjudicating disputes arising under the Ordinance. It consists of a presiding officer who is a legal expert and two members, one technical and one financial. Appeals lie to the Supreme Court within sixty days. Additionally, the Authority must constitute a Shariah Advisory Committee to advise on Shariah compliance of virtual asset products and services. Licensees seeking such certification must submit an application to the Authority. Schedule 1 defines categories of virtual asset services, while Schedules 2 and 3 prescribe paid-up capital requirements, significant issuer thresholds, and reserve metrics
Also Read: Virtual Assets in Pakistan: How the 2025 Ordinance Changes the Game for Investors and Businesses
