Pakistan's approach to cryptocurrency has entered a new phase. The Virtual Assets Act, 2026, established a statutory framework, with the Pakistan Virtual Assets Regulatory Authority (PVARA) responsible for licensing and overseeing virtual asset service providers.
On April 14, 2026, the State Bank of Pakistan (SBP) also replaced its earlier restrictive banking instructions with a framework allowing banks to open accounts for appropriately licensed providers, subject to safeguards. PVARA's Pakistan Virtual Asset Services Regulations, 2026, and Activity Specific Regulations, 2026, were notified on August 21, 2026.
These developments are important, but licensing a service provider does not endorse every crypto-asset, guarantee its value or authorise every transaction a customer may undertake. Nor does it, by itself, settle whether a resident may buy assets through an overseas exchange, transfer them offshore, sell them abroad or retain the proceeds outside Pakistan.
That is the regulatory gap that now deserves attention. This is not an argument against cryptocurrency; it is an argument for connecting virtual-asset regulation with Pakistan's foreign-exchange and tax frameworks.
Consider a Pakistani resident who uses a local debit or credit card to buy crypto-assets on an overseas platform. The payment settles through the international payments system, creating a foreign-currency outflow.
The resident later transfers the assets to another platform, sells them and retains the proceeds abroad. If they do not bring those proceeds back, the original outflow may not be matched by a corresponding inflow.
This does not mean every offshore holding is unlawful or constitutes capital flight. The legal position depends on the transaction, applicable permissions, payment channel and individual circumstances.
Residents may have legitimate reasons to hold assets abroad. The concern is that Pakistan should not inadvertently create a route for rupee-funded overseas purchases without clear rules for the subsequent transfer, sale and retention of value.
Crypto-assets can move quickly between exchanges and self-hosted wallets, sometimes without a conventional bank transfer at every stage. A bank may see a card payment at purchase, while subsequent transfers and sales occur beyond its direct view.
The SBP's Foreign Exchange Circular No 07 of 2022 set an annual limit of $30,000 per individual for card-based cross-border transactions and required payments to be consistent with personal needs and customer risk profiles, excluding commercial-purpose payments through individual cards. That limit should not be read as blanket permission to buy crypto.
The SBP and PVARA need to clarify how existing rules apply to crypto purchases and related offshore transfers. First, foreign exchange pressure: If substantial rupee-funded purchases become assets held abroad, they could increase demand for foreign currency without a transparent way to track the eventual proceeds.
The scale of the risk should be measured, not assumed. Second, tax leakage: A sale may generate a taxable gain, but the gross sale amount is not necessarily profit.
Authorities need reliable records of acquisition costs, sale proceeds, fees, transfers, and ownership, along with clear rules for calculating gains and recognising losses. Third, consumer and financial-integrity risks: Unbacked crypto-assets can lose most or all of their value, and customers may have limited recourse against offshore platforms.
Addressing these structural challenges requires close institutional coordination between the central bank and the virtual assets regulator. Comprehensive guidelines will ensure long-term stability and security.
Ultimately, a robust digital asset economy must balance technological innovation with strict financial oversight to protect the broader national economic interest of Pakistan.