Pakistan establishes Virtual Asset Regulatory Authority to promote compliance development of digital assets

The federal government of Pakistan recently announced the official establishment of the Pakistan Virtual Assets Regulatory Authority (PVARA), the country's first independent agency dedicated to managing and regulating the virtual asset industry. The new agency will be responsible for regulating digital asset-related businesses, issuing licenses, supervising the operation of virtual asset service providers (VASPs), and ensuring that they comply with international anti-money laundering and counter-terrorist financing standards, including the Financial Action Task Force (FATF).

Pakistan Finance Minister Muhammad Aurangzeb said at the press conference that the establishment of PVARA marks a key step for Pakistan in fintech regulation. The government hopes to attract global capital inflows by building an innovative and transparent regulatory framework while providing a clear development path for local fintech companies.

Although the International Monetary Fund (IMF) has expressed concerns about Pakistan's proposal to provide electricity subsidies to high-energy-consuming industries (including Bitcoin mining), believing that this may affect the country's fiscal stability and energy efficiency, Pakistan still insists on promoting the policy direction of digital transformation and crypto economy. The establishment of PVARA is considered to be an initiative of the Pakistani government to seek a breakthrough between balancing international regulatory pressure and promoting domestic technological innovation.

Industry analysts pointed out that as virtual asset regulation in South Asia becomes clearer, Pakistan may play a more active role in the regional digital financial layout in the future. PVARA will next formulate industry guidelines, improve the licensing process, and initiate an information sharing mechanism with international regulators to further improve market transparency and trust.