Pakistani Crypto Exchange Licensing Requirements and Process in 2025

What You Need to Know About Getting a Crypto Exchange License in Pakistan

In July 2025, Pakistan opened its doors to licensed cryptocurrency exchanges - but only for companies that already play by the rules elsewhere. The new Pakistan Virtual Asset Regulatory Authority (an independent federal regulator created under the Virtual Assets Ordinance 2025 to oversee all virtual asset service providers) is the only gateway for crypto exchanges to operate legally in the country. This isn’t a free-for-all. It’s a tightly controlled entry system designed to keep out unregulated players and attract only the most compliant global firms.

Before you even start filling out forms, understand this: PVARA doesn’t care if you’re new to crypto. They only want companies that have already passed the toughest tests abroad. That means if you’re not licensed by the UK Financial Conduct Authority, the US Securities and Exchange Commission, the Monetary Authority of Singapore, the UAE Virtual Assets Regulatory Authority, or an equivalent EU VASP regulator, you’re not eligible. No exceptions.

Who Can Apply for a License?

Only Virtual Asset Service Providers (VASPs) that meet one condition: they’re already regulated in a jurisdiction with strong anti-money laundering (AML) and know-your-customer (KYC) standards. This isn’t about size or brand recognition - it’s about proof of compliance. A startup from Nigeria or Indonesia with no foreign regulator oversight? Not eligible. A crypto exchange based in London with FCA approval? That’s your ticket.

PVARA is targeting specific business models:

• Cryptocurrency exchanges (spot and derivatives trading)
• Custody and wallet services
• Payment processors that handle crypto-to-fiat conversions
• Tokenization platforms (real-world assets on blockchain)
• Staking and lending platforms

But here’s the catch: even if you offer one of these services, you still need to show you’ve done this before - and done it right. PVARA wants to see your track record, not your pitch deck.

The Application Process: Step by Step

The process starts with an Expression of Interest (EoI). This isn’t a form you fill out online - it’s a PDF document you email directly to PVARA. The subject line must read: "EoI VASP Licensing [Your Company Name]". Miss this detail, and your application gets tossed.

Inside the PDF, you need to include:

• Full company registration documents from your home country
• Copies of all active international licenses (with issuing authority and expiry dates)
• Detailed description of your services - what you offer, how you operate, and your user base size
• Technology and cybersecurity protocols (penetration test reports, encryption standards, cold storage methods)
• Assets under management (AUM) figures from the last fiscal year
• Revenue and profitability statements (audited preferred)
• History of regulatory violations or investigations - full disclosure required
• A Pakistan-specific operational plan: how you’ll handle local users, KYC checks, and reporting to PVARA

All documents must be in English. Translations must be certified. No handwritten notes. No screenshots of dashboards. Everything needs to be formal, clear, and verifiable.

Compliance Is Non-Negotiable

PVARA follows the Financial Action Task Force (FATF) guidelines. That means your platform must have:

• Real-time transaction monitoring for suspicious activity
• Full KYC verification for every user - including government ID and proof of address
• Travel Rule compliance: you must share sender and recipient data for transfers over $1,000
• Annual independent audits of your AML/CFT systems
• A designated compliance officer based in Pakistan or with direct oversight from your HQ

One company that applied in August 2025 got rejected because their KYC system didn’t verify Pakistani national ID numbers. They were using passport checks only. PVARA said: "We don’t care if you’re compliant in Dubai - here, you need to verify local IDs."

How Long Does It Take?

There’s no fixed deadline. PVARA reviews applications on a rolling basis. But they’ve said it takes at least three months from submission to license issuance. Why so long? Because they’re doing deep due diligence. They’re cross-checking your licenses with foreign regulators. They’re verifying your revenue numbers. They’re even reaching out to your past customers for feedback.

There’s no batch processing. No "we’ll review all applications in January." If you submit in October, you could get a decision by December - or wait until February. Speed isn’t the goal. Trust is.

The Contradiction No One Talks About

Here’s the biggest problem: while PVARA is inviting crypto exchanges in, the State Bank of Pakistan still says cryptocurrency is illegal under banking law. That means:

• Even if you have a PVARA license, you can’t open a bank account in Pakistan to hold fiat funds
• Local banks can’t process crypto deposits or withdrawals
• Users can’t link their Pakistani bank accounts to licensed exchanges

This creates a legal grey zone. PVARA says you’re legal. The central bank says you’re not. So how do you operate? Right now, most licensed exchanges use offshore banking partners - like those in the UAE or Singapore - to handle fiat on-ramps. Users deposit via international wire transfers or peer-to-peer (P2P) platforms. It’s messy. It’s not ideal. But it’s the only way.

Analysts call this contradiction "paradoxical." The government wants to attract billions in crypto investment, but won’t let exchanges connect to the local financial system. Until this changes, growth will be limited.

What About Bitcoin Mining?

At the Bitcoin Vegas 2025 conference, Pakistan announced plans for a government-backed Strategic Bitcoin Reserve and proposed allocating 2,000 MW of electricity for mining and AI data centers. Sounds bold - until you learn the International Monetary Fund (IMF) rejected the plan outright.

The IMF’s objections were clear: subsidized electricity for mining would cost the state billions, worsen power shortages, and set a dangerous precedent. As of November 2025, that plan is frozen. No mining licenses are being issued. The focus remains strictly on exchanges and VASPs.

Shariah-Compliant Crypto Is a Big Deal

PVARA isn’t just copying Western rules. They’ve built in special regulatory sandboxes for Shariah-compliant crypto products. This means:

• Staking platforms can be approved if they avoid interest-based mechanisms
• Tokenized assets must avoid gambling, alcohol, or pork-related industries
• Smart contracts must be reviewed by a panel of Islamic finance scholars

This isn’t just a marketing tactic. Pakistan has over 220 million Muslims. By making crypto acceptable under Islamic law, PVARA is targeting a massive, underserved market. Several firms from Malaysia and Indonesia have already expressed interest in launching halal crypto services here.

What’s Next?

The Senate is pushing to move the Pakistan Crypto Council from the Ministry of Finance to the Ministry of Information Technology. Why? Because crypto is a tech issue, not just a finance one. That shift could mean better coordination and clearer rules down the line.

Meanwhile, the State Bank is quietly preparing a pilot for its own Central Bank Digital Currency (CBDC). That’s a signal: the government isn’t against digital money. It just wants to control it.

For now, the licensing window is open - but only to a select few. If you’re a global exchange with strong compliance, solid tech, and patience, Pakistan could be your next market. If you’re looking for a quick win or think you can bypass the rules? You won’t get far.

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