By Staff Reporter
ISLAMABAD: The Senate passed the Virtual Assets Bill 2025 on Friday, paving the way for the establishment of a dedicated regulatory authority to license, regulate and supervise virtual asset activities across the country.
The legislation, moved by Finance Minister Muhammad Aurangzeb, was taken up for immediate consideration after the house suspended its normal rules. It now advances to the National Assembly and, if approved there, will go to President Asif Ali Zardari for assent to become law.
The bill provides parliamentary cover for the Pakistan Virtual Assets Regulatory Authority, which was set up under a presidential ordinance in July 2025. That temporary measure, extended once in November, is scheduled to lapse in early March, making the legislation essential to avoid any gap in oversight.
Virtual assets are digital representations of value that can be traded, transferred or used for payment and investment purposes through electronic networks, typically relying on blockchain or distributed ledger technology. They include cryptocurrencies such as Bitcoin and Ethereum, stablecoins pegged to fiat currencies or other assets, digital tokens for fundraising or utility, and other blockchain-based instruments. Unlike currencies issued by central banks, they function on decentralized systems with values determined by market demand, underlying assets or programmed rules.
The bill’s preamble states that it was expedient to create the authority to ensure investor protection, transparency and market integrity. It also equips the regulator to combat money laundering, terrorist financing, proliferation financing and other illicit activities involving virtual assets, in line with international standards.
PVARA will operate as an autonomous corporate body empowered to license, regulate and supervise virtual asset service providers and issuers. Its mandate includes protecting customers and investors by enforcing safeguards, conduct-of-business requirements, prudential standards, operational resilience and risk-management measures. The authority will also seek to attract investment, encourage companies in the sector to base operations in Pakistan, promote responsible innovation and digital financial inclusion, and support the development of compliant virtual asset markets — including Shariah-compliant services — within a framework that safeguards financial stability.
The regulator will promote, develop, govern and regulate the adoption of blockchain and distributed ledger technology nationwide. It will coordinate with the Financial Monitoring Unit, the National Anti-Money Laundering and Counter Financing of Terrorism Authority, law enforcement agencies and other bodies to address illicit finance risks under the Anti-Money Laundering Act of 2010 and global norms. PVARA will further advise the government on regulatory, supervisory, technical or emerging-risk issues related to virtual assets, digital markets, tokenization, stablecoin structures, cyber risks and connected matters.
Under the bill, the authority can issue regulations, standards, directives, guidelines and other instruments. It will set risk-management, cybersecurity and data-protection requirements, and will be able to issue, vary, suspend or revoke licenses and approvals. PVARA can impose administrative sanctions and levy fees, charges and penalties as prescribed.
The board will comprise a chairperson appointed by the federal government, two ex-officio secretaries from the law and finance ministries, the State Bank of Pakistan governor, the Securities and Exchange Commission of Pakistan chairperson, the National Anti-Money Laundering and Counter Financing of Terrorism Authority chairman, the Pakistan Digital Authority chairperson, and two independent directors with proven expertise in virtual asset markets, digital technology and finance. All appointments are by the federal government. Members other than ex-officio officials will serve three-year terms and be eligible for one further three-year term.
Penalties are stiff. Anyone who willfully provides an unlicensed virtual asset service faces up to five years in prison, a fine of as much as 50 million rupees, or both. Conducting an initial virtual asset offering in violation of the rules carries up to three years imprisonment, a fine of up to 25 million rupees, or both. The legislation also penalizes market manipulation and insider trading.
A Virtual Assets Appellate Tribunal will be established to handle disputes. No court will have jurisdiction over matters assigned to the tribunal. Aggrieved parties, including licensees or service providers, can appeal PVARA orders within 30 days of being notified.
The move aligns Pakistan with regulatory approaches in jurisdictions such as the United Arab Emirates, Singapore, India and the European Union. Officials have emphasised the government’s commitment to responsible adoption of virtual assets, support for financial innovation — including through regulatory sandboxes — and stronger safeguards against illicit activity in a market that has operated without formal oversight until now.
The bill’s statement of objects and reasons notes that virtual assets, as an evolving part of the modern financial ecosystem, require a dedicated supervisor to foster safe trading, prevent fraud and enhance global competitiveness while promoting economic growth and financial inclusion. “The passage of this bill through the Senate represents a defining moment for Pakistan’s digital economy,” PVARA Chairman Bilal bin Saqib said, according to Arab News. “We are transforming years of unregulated activity into a transparent, secure, and investor-friendly ecosystem that positions Pakistan as a credible jurisdiction for virtual assets.”
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