Pakistan Opens Doors to Regulated Exchanges as Critics Raise Red Flags Over Its Crypto Strategy

Key Requirements for Global Exchanges

The Pakistan Virtual Asset Regulatory Authority (PVARA) has formally invited leading global exchanges and service providers to participate in the country’s digital economy. The invitation is, however, limited to companies already licensed and regulated by recognized international agencies, including the U.S. Securities and Exchange Commission (SEC), the U.K. Financial Conduct Authority (FCA), and the U.A.E.’s Virtual Assets Regulatory Authority (VARA).

According to a local report, applicants must also demonstrate compliance with anti-money laundering (AML), counter-terrorism financing (CTF), and know-your-customer (KYC) standards.

Bilal bin Saqib, PVARA’s chairman and minister of state for crypto and blockchain, said the Expressions of Interest (EoI) invitation demonstrates Pakistan’s readiness to “embrace established platforms.”

“This EoI is our invitation to the world’s leading VASPs to partner in building a transparent and inclusive digital financial future for Pakistan,” Saqib said.

This initiative is a major milestone for a country with more than 40 million virtual asset users and an estimated annual trading volume exceeding $300 billion. Formally established under the Virtual Assets Ordinance 2025, PVARA is a key driver of the country’s pro- crypto stance, with a mission to empower its youth, stimulate economic growth, and position Pakistan as a global leader in the digital asset space.

Regulatory Hurdles and Illicit Finance Concerns

Despite the government’s newfound embrace of cryptocurrencies, some experts remain critical. Shabbar Zaidi, an economist and former chairman of the Federal Board of Revenue (FBR), warned that the very design of cryptocurrencies makes them extremely difficult to regulate.

“ Cryptocurrencies flourish because they leave no trail. A currency born unregulated cannot be regulated,” Zaidi argued.

The economist claimed that these digital assets are increasingly being used to facilitate cross-border transactions, particularly in cases of under-invoicing in trade with China. He noted that these practices mirror the informal and opaque mechanisms of the traditional hawala system, allowing parties to bypass conventional banking channels and regulatory oversight.

Application Requirements

To gain entry into the Pakistani market, PVARA advises that global exchanges must submit applications accompanied by an overview of their services, along with detailed documentation of their technology and security protocols. Applicants are also required to provide data on assets under management, revenue figures, and a summary of their compliance history.