Pakistan's Crypto Gambit: Regulation, Reserves, and Regional Ambition

Pakistan has officially opened its doors to global cryptocurrency firms, signaling a major shift in its regulatory approach to digital assets. On September 14, 2025, the Pakistan Virtual Asset Regulatory Authority (PVARA) invited international exchanges and service providers to submit applications for licenses to operate within the country. This marks a strategic move to formalize the crypto market and align it with global compliance standards.

Under the Virtual Assets Ordinance 2025, which came into effect in July, PVARA is empowered to regulate and supervise the virtual asset sector. The authority adheres to international norms set by organizations like the Financial Action Task Force (FATF), the International Monetary Fund (IMF), and the World Bank. To qualify for a license, firms must already be licensed by prominent global regulators such as the U.S. Securities and Exchange Commission (SEC), the UK Financial Conduct Authority (FCA), or regulatory bodies in the EU, UAE, or Singapore.

Applicants must provide detailed documentation, including company profiles, operational licenses, service offerings, cybersecurity measures, and a specific business plan for Pakistan. The licensing process is ongoing, with no fixed deadline, and applications are reviewed as they are received.

Pakistan’s crypto market has grown substantially, with over 40 million users and an annual trading volume exceeding $300 billion. The country climbed to third place in Chainalysis’ 2025 Global Crypto Adoption Index, moving up six spots from the previous year. This rapid growth occurred despite years of regulatory ambiguity, during which the government initially banned Bitcoin trading in 2018 before gradually easing restrictions.

In addition to licensing exchanges, Pakistan has announced plans for a strategic Bitcoin reserve, unveiled at the Bitcoin 2025 conference in Las Vegas. Officials confirmed that these reserves will not be sold but will instead serve as a long-term asset. Furthermore, 2,000 megawatts of electricity have been allocated for Bitcoin mining and AI data centers, potentially positioning Pakistan as one of the top five global Bitcoin mining hubs.

However, these plans have drawn concerns from international institutions. The IMF has expressed worries about the use of surplus electricity for mining, given Pakistan’s existing energy and financial challenges. The government did not consult the IMF before announcing the electricity allocation, which could complicate ongoing financial negotiations. Additionally, the country is working to align its crypto initiatives with Islamic finance principles, requiring the formation of a Shariah Advisory Committee.

The licensing process is expected to take at least three months, according to Finance Ministry officials. PVARA’s regulatory body includes high-ranking officials from Pakistan’s central bank, securities commission, and tax authority, emphasizing the government’s commitment to a robust regulatory framework. The country’s approach balances innovation with caution, aiming to attract foreign investment while safeguarding financial stability and consumer protection.

Pakistan’s invitation to global crypto firms reflects a broader ambition to position itself as a regional leader in digital finance. By leveraging its young, tech-savvy population, regulatory clarity, and energy surplus, the country is creating a compelling environment for international players. The government’s efforts to build a transparent, inclusive digital economy are part of a larger vision to integrate blockchain and digital assets into Pakistan’s financial landscape.