Pakistan’s crypto regulator has given firms less than two weeks to start the country’s new licensing process or face shutdown. The Pakistan Virtual Assets Regulatory Authority (PVARA) set a September 5 deadline for companies already offering virtual asset services on or before March 5 — the date the Virtual Assets Act took effect. Those firms are designated “transitional persons” and must submit applications for a No Objection Certificate (NOC) by that date. “Operating without submitting an application after that date is an offense,” PVARA said, citing Section 70 of the Virtual Assets Act 2026. The online portal is also accepting applications for full licenses and for a regulatory sandbox. Why it matters - Firms that don’t apply by Sept. 5 risk criminal liability and being forced offline. - Approved licensees will gain formal access to Pakistan’s banking system — a major hurdle for crypto businesses since banks were barred from servicing the sector for eight years until the ban was recently lifted. - Offshore platforms serving Pakistani users will need a locally incorporated entity: after an NOC is issued, firms must register with the Financial Monitoring Unit, incorporate a Pakistan subsidiary, then submit a full license application. What PVARA requires PVARA’s framework covers a broad set of virtual-asset activities and imposes strict entry conditions: - Licensed categories include exchanges, custody, broker-dealer services, advisory, lending and borrowing, derivatives, discretionary asset management, transfer/settlement services, mining infrastructure, and issuance of tokens pegged to assets or a fiat currency. Firms may apply for multiple categories. - Applicants must be companies registered in Pakistan under the Companies Act 2017 and meet minimum paid-up capital thresholds by category. - Directors and key personnel must pass a fit-and-proper test. - Robust AML systems are required: customer due diligence (KYC), transaction monitoring and suspicious-activity reporting. - Cybersecurity measures and a business continuity plan must be in place. - Licensed firms must segregate customer holdings and may not lend or pledge customer assets without written consent — explicitly making these protections legal obligations rather than voluntary promises. Regulatory pitch and market context PVARA Chairman Bilal bin Saqib outlined the rules in a televised briefing, saying the framework is designed to curb fraud and bring the market under rule of law. He pointed to broader economic benefits: stablecoins and tokenization could support export financing, remittances and lending to smaller businesses. The regulator was set up by presidential ordinance in July 2025 and was made permanent under the Virtual Assets Act 2026. Pakistan’s crypto market has high retail adoption — ranked third in Chainalysis’ 2025 global crypto adoption index — and Islamabad has signaled ambitious policy moves including plans for a strategic Bitcoin reserve. In July the government also established a unit within the Federal Investigation Agency to pursue criminal uses of digital assets. Who’s already compliant Binance and HTX are among platforms that already hold NOCs. For other exchanges and service providers operating in or offering services to Pakistani users, the clock is now ticking. Read more AI-generated news on: undefined/news