Pakistan Enacts Virtual Assets Ordinance 2025 to Regulate Cryptocurrency and Digital Finance Sector

ISLAMABAD: The federal government has officially enacted the Virtual Assets Ordinance, 2025, establishing a dedicated regulatory authority to oversee the growing sector of virtual assets and cryptocurrencies in Pakistan.

Signed into law by President Asif Ali Zardari, the ordinance sets up the Pakistan Virtual Asset Regulatory Authority (PVARA), an autonomous federal body tasked with licensing, regulating, and supervising virtual asset service providers across the country.

Initially, confusion arose when the state minister’s office referred to the ordinance as the Virtual Assets Act, 2025, raising questions about whether the legislation had gone through the appropriate parliamentary procedures. Authorities later confirmed that the law was promulgated as an ordinance — not an act of parliament — under Article 89 of the Constitution, which allows the president to issue temporary laws when the National Assembly and Senate are not in session. The ordinance will remain in force for 120 days unless extended or formally enacted by Parliament.

According to the Gazette of Pakistan dated July 9, 2025, the ordinance was promulgated a day earlier to lay the legal groundwork for regulating the virtual asset ecosystem. This includes licensing criteria, compliance requirements, and operational oversight for individuals or companies dealing with digital assets within or from Pakistan.

The authority will be governed by a board comprising high-level representatives from the State Bank of Pakistan (SBP), Ministry of Finance, Ministry of Law and Justice, Ministry of IT & Telecom, SECP, FBR, and the Digital Pakistan Authority. Additionally, two independent experts in law, finance, or technology will be appointed, with the chairperson selected based on relevant experience in regulatory or financial domains.

Under the ordinance, virtual asset service providers must obtain a license from PVARA to operate. A structured licensing regime will be introduced, accompanied by rigorous compliance, operational, and reporting standards. The authority will also establish a regulatory sandbox, enabling startups and innovators to test new technologies under regulatory supervision.

To further support innovation while maintaining oversight, PVARA will be empowered to issue no-action relief letters in specific cases. In a first for the digital finance space, the ordinance also mandates a Sharia Advisory Committee to ensure virtual asset products adhere to Islamic finance principles. Licensed Islamic offerings will be subject to the committee’s rulings.

A dedicated Virtual Assets Appellate Tribunal will be formed to handle disputes and appeals related to regulatory decisions. The tribunal will function with judicial independence and comprise experts in finance, law, and technology.

This ordinance represents a significant step toward building a transparent, secure, and innovation-led digital finance ecosystem in Pakistan. The move follows the formation of the Pakistan Crypto Council (PCC) in March 2025. Finance Minister Muhammad Aurangzeb chairs the PCC, while entrepreneur Bilal Bin Saqib serves as its CEO and special assistant to the Prime Minister.

By aligning with international standards — including those set by the Financial Action Task Force (FATF) — Pakistan aims to attract investment, boost financial inclusion, and regulate the evolving virtual asset landscape with institutional readiness and public interest at its core.