Sharif met with PVARA Chairman Bilal Bin Saqib on Friday and ordered what he called full and early operationalisation of an internationally aligned virtual assets regulatory system. The session covered the regulator's transition to full operations, the launch of a formal regulatory sandbox, plans for AI-driven payment infrastructure, and workforce training initiatives.

"An effective and internationally aligned regulatory system in the virtual assets sector should be made fully operational as soon as possible to promote the digital economy and increase investor confidence in Pakistan," Sharif said following the meeting, according to the Express Tribune.

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From Ordinance to Statute

PVARA was created by presidential ordinance on July 8, 2025, signed by President Asif Ali Zardari. In Pakistan's constitutional structure, the president and the prime minister are separate offices, and the ordinance mechanism allowed the executive to establish the regulator before Parliament acted. Pakistan's Parliament then converted PVARA into a permanent statutory body by passing the Virtual Assets Act 2026 in March of this year. That legislation fulfilled a reform milestone attached to Pakistan's ongoing IMF programme, giving the agency formal powers to issue licenses, suspend operators, levy fines of up to Rs. 50 million (roughly $180,000 USD at current exchange rates), and pursue criminal penalties including imprisonment for unlicensed activity. The institutional build received further support in September 2025, when Pakistan's Economic Coordination Committee approved a grant of Rs. 800 million (approximately $2.86 million) to fund PVARA's operations.

The regulator issued its first formal approvals in December 2025, granting No Objection Certificates (NOCs) to Binance and HTX. Those certificates represent stage two of a five-step licensing process that concludes with a full Virtual Asset Service Provider (VASP) license. NOC decisions are due within 60 calendar days for complete applications.

In April, the State Bank of Pakistan (SBP) ended a seven-year prohibition on crypto banking services, authorizing all regulated banks to open accounts for PVARA-licensed VASPs. The SBP directive is conditional: banks may service licensed providers but remain barred from trading or holding crypto assets themselves. For the first time, crypto-to-fiat settlement can move through regulated financial institutions in Pakistan.

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Sandbox Opens; Pilots Require Prior Approval

PVARA's regulatory sandbox is now accepting applications at sandbox@pvara.gov.pk. Eligible participants include blockchain startups, fintech firms, financial institutions exploring tokenization, infrastructure providers, and international companies seeking market entry. Live testing periods can run up to 18 months, with a defined pathway to full VASP licensing at the end of the process.

The regulator issued a separate advisory on April 27 requiring prior authorization for all virtual asset pilots, including stablecoin remittance schemes, blockchain memoranda of understanding, and experimental deployments. PVARA warned that unauthorized pilots carry direct regulatory consequences and risk harming Pakistan's standing on FATF compliance metrics. The Financial Action Task Force (FATF) is an intergovernmental body that sets anti-money-laundering and counter-terrorism financing standards; Pakistan was removed from its grey list in 2022, and the country's regulatory framework is structured to prevent a return.

"Innovation is welcomed, it must operate strictly within a regulated framework to ensure legal compliance, financial integrity, and international standards alignment," PVARA said in its April position statement.

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Scale of the Market

Pakistan ranked third globally in Chainalysis's 2025 Crypto Adoption Index, behind India and the United States. Depending on the methodology used, between 15.9 million and 27.1 million Pakistanis held or traded crypto assets in 2025, with at least one industry estimate suggesting as many as 40 million engaged citizens, though methodologies differ significantly across sources. The country receives approximately $38.3 billion in annual remittances, a flow that represents a use case Bin Saqib has pointed to for regulated stablecoin infrastructure.

More than 100 million Pakistani adults remain outside the formal financial system. That figure frames the practical stakes of the regulatory buildout: the unbanked population represents the most direct potential beneficiary class of crypto-to-fiat on-ramps once the licensing regime is fully operational.

Bin Saqib, who also holds the title of Minister of State and reports directly to the Prime Minister's Office, described the sector's significance in broader terms in remarks reported by Daily Pakistan on April 30. "Virtual assets are not just an emerging trend but a foundational component of the future economy," he said.

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What Comes Next

Pakistan has also allocated 2,000 megawatts of surplus electricity from underused coal-fired plants to Bitcoin mining and AI data centers, a policy announced by Sharif in May 2025. That initiative includes tax and duty exemptions for foreign miners, though the IMF has raised concerns about diverting power in a country that still experiences load-shedding.

The government has separately set a target of tokenizing up to $2 billion in state assets under the framework created by the Virtual Assets Act.

Friday's directive from the Prime Minister signals that full PVARA operationalisation is now a stated executive priority, not just a legislative outcome. For firms seeking market entry, the practical implication is straightforward: engage the regulator before announcing any partnership or pilot, not after. Pakistan's trajectory from prohibition to statutory licensing also draws attention beyond its borders; analysts tracking high-adoption, high-unbanked markets in Africa and South Asia have noted the country's framework as a potential reference model for jurisdictions navigating similar regulatory transitions.