As dollar shortages persist in Pakistan’s open market, a growing number of users are turning to digital alternatives to access foreign currency, even as the Pakistan Virtual Assets Regulatory Authority (PVARA) continues to deliberate on detailed regulations for the crypto sector. In the absence of a clear framework, adoption is accelerating outside formal channels, raising concerns among regulators, financial institutions and industry observers.
While unregulated operators are already active, one segment of the market remains on hold: firms seeking to operate legally. Several startups and international players are reportedly recalibrating their strategies as they await regulatory clarity. An insider at Zar, a crypto-focused startup, said the company has shifted its immediate focus to African markets, citing uncertainty in Pakistan. According to the source, further investment decisions in Pakistan hinge on the release of comprehensive regulations.
Crypto analyst Aatiqa Lateef said this cautious approach is understandable, noting that serious firms prioritise jurisdictions with predictable regulation, banking integration and a clear supervisory roadmap. While welcoming the establishment of PVARA, she warned that prolonged uncertainty risks rewarding grey-market behaviour instead of compliant actors. She identified unresolved questions around banking access, the scope of no-objection certificates (NOCs), and the regulatory treatment of stablecoins.
Market indicators suggest that crypto adoption is expanding regardless of regulatory delays. Malik Bostan, chairman of the Exchange Companies’ Association of Pakistan, said customers purchased an estimated $1.2 billion from exchange companies over 11 months to place in foreign currency accounts, but only about $400 million was deposited with banks. He suggested that the remaining amount may have flowed into crypto channels, particularly stablecoins.
Ms Lateef described this trend as a warning sign, arguing that foreign exchange liquidity appears to be shifting from formal systems into informal digital dollar rails, potentially increasing pressure on Pakistan’s regulated FX market.
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Some progress has been reported on the licensing front. According to legal expert Mariam Saleem, major platforms such as Binance and HTX have received preliminary NOCs, allowing them to initiate incorporation with the Securities and Exchange Commission of Pakistan before applying for full, activity-specific licences from PVARA. However, she said firms remain cautious due to uncertainty over fees, timelines and supervisory expectations.
While a source inside Zar said regulations are supposed to come out in the next few weeks, this raises an important question about the transparency of this process.https://t.co/HNVsOTg18f
— Dawn Business (@dawn_business) December 29, 2025
Banks are also monitoring developments closely. Pakistan Banks Association Secretary Mir Nejib Rahman said there is industry interest in stablecoins and crypto-based remittances, but all discussions remain exploratory. He stressed that banks will not proceed without clear regulations from the State Bank of Pakistan, which depend on PVARA’s detailed guidelines.
Experts broadly agree that the next phase of crypto regulation must balance innovation with financial stability. They emphasise the need for clear rules on consumer protection, custody, disclosures and oversight, arguing that while industry input is valuable, regulatory authority must remain firmly with the state to safeguard Pakistan’s financial system.
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