Main Points：
- Establishment of the Pakistan Virtual Assets Regulatory Authority (PVARA)
- Consumer protection, AML/CFT, and cybersecurity oversight
- Strategic Bitcoin reserve plan and government’s long-term holding policy
- High-level advisory roles and international partnerships
- Comparison with global peers and regional regulatory trends
Establishment of PVARA: A New Regulatory Era
On July 7, 2025, Pakistan’s federal cabinet unanimously approved the creation of the Pakistan Virtual Assets Regulatory Authority (PVARA), positioning it as an independent regulator charged with licensing, supervising, and overseeing virtual asset service providers (VASPs). Drawing on Financial Action Task Force guidelines and international best practices, PVARA will enforce robust frameworks for consumer protection, anti–money laundering (AML) and counter–terrorism financing (CFT), and cyber-risk mitigation. In effect, Pakistan moves from informal pilot projects to a formalized legal regime, establishing the foundational infrastructure needed to foster a secure and transparent digital asset ecosystem.
Consumer Protection, AML/CFT, and Cybersecurity Oversight
PVARA’s mandate extends beyond licensing to ensuring that VASPs adhere to stringent consumer-protection standards. This includes mandating clear disclosures on fees, transaction risks, and dispute-resolution channels. On the AML/CFT front, PVARA will require VASPs to implement customer due-diligence (CDD) protocols, transaction monitoring, and suspicious-activity reporting, thereby aligning Pakistan’s framework with FATF recommendations. Cybersecurity measures will also form a core pillar, as PVARA sets minimum technical standards for safeguarding digital wallets and exchange platforms against hacking and data breaches.
Strategic Bitcoin Reserve Initiative
In May 2025, at the Bitcoin 2025 conference in Las Vegas, Pakistan’s Crypto Council CEO Bilal Bin Saqib announced the government’s plan to establish a strategic Bitcoin reserve, declaring, “the government will hold Bitcoin and never sell it”. This initiative follows in the footsteps of El Salvador, which has amassed over 6,102 BTC in its state reserve and continues to add more despite IMF concerns. With 40 million Pakistani users conducting approximately $300 billion in annual transactions (¥44 trillion, or about $293 billion at ¥150/USD), Pakistan aims to leverage BTC’s long-term value appreciation and DeFi yield-generation strategies to diversify national reserves and offer unbanked citizens new saving instruments.
High-Level Advisory Roles and International Partnerships
The Pakistani government has recruited heavyweight advisors to guide its crypto roadmap. In March, the Crypto Council appointed Binance co-founder Changpeng “CZ” Zhao as a strategic advisor, tapping his expertise on regulatory frameworks and blockchain infrastructure. In June, Michael Saylor, chairman of Strategy and a prominent Bitcoin advocate, met with Finance Minister Muhammad Aurangzeb and Crypto Council leadership to advise on reserve-management and treasury strategies. Additionally, in April, Pakistan entered into a memorandum of understanding with World Liberty Financial (WLFI), the Trump-family–backed Web3 project, to explore real-world-asset (RWA) tokenization, stablecoin development, and DeFi regulations.
Global and Regional Regulatory Trends
Pakistan’s push to formalize its crypto ecosystem reflects a broader trend across emerging markets. In El Salvador, legislative reforms have made bitcoin’s acceptance voluntary following an IMF loan agreement, while still maintaining an aggressive BTC-buying policy. Meanwhile, the European Central Bank has ruled out bitcoin reserves until at least 2027, though U.S. lawmakers and several states are exploring national crypto stockpiles. In South Asia, India continues to debate a comprehensive Digital Assets Bill, and the UAE has launched multiple crypto sandboxes to attract fintech capital. Pakistan’s timeline of strategic events—from the Crypto Council in March to PVARA in July—is captured in the figure above.
Challenges and the Path Forward
Despite these advances, significant challenges remain. The IMF has rejected Pakistan’s proposal to subsidize electricity for Bitcoin mining—part of a plan to allocate 2,000 MW of surplus power at $0.08/kWh—warning of market distortions and economic imbalances. Negotiations continue, however, with the IMF, World Bank, and other partners to refine energy incentives without jeopardizing fiscal stability. Additionally, ensuring robust enforcement, preventing illicit finance, and building local technical capacity will be critical tasks for PVARA and allied agencies.
Conclusion
Pakistan’s establishment of PVARA and its strategic Bitcoin reserve signal a decisive shift towards integrating blockchain and digital assets into national economic policy. By combining rigorous regulatory oversight, innovative partnerships, and a bold asset-holding strategy, Pakistan aims to position itself as the “cryptocurrency hub” of South Asia. Success will hinge on balancing growth and innovation with financial stability and risk management. If executed effectively, Pakistan’s blueprint could serve as a model for other emerging economies seeking to harness the transformative potential of blockchain technology.
