Crypto in Pakistan 2026: What’s Legal, What’s Risky, and What’s Next?

In 2025, Pakistan became the third-largest country in the world for crypto adoption, just after India and the United States.

Yet, the legal status of cryptocurrencies in Pakistan remains uncertain in 2026. While the State Bank of Pakistan (SBP) asserts that they are legal, there is no regulatory framework for virtual assets in the country. This means financial institutions have been advised to avoid dealing with them. However, the Pakistan Crypto Council (PCC) was set up in 2025 to address this shortcoming and draft a comprehensive legal framework for blockchain and digital assets in the country.

In 2025, the government established the Pakistan Virtual Assets Regulatory Authority (PVARA) under the Virtual Assets Ordinance, 2025, to regulate virtual asset service providers. Nevertheless, earlier confusion about crypto status in Pakistan and the lack of regulations mean virtual asset users in the country still face uncertainty.

Let’s dive into the most pressing questions concerning the status of crypto in Pakistan, including the legality of holding, trading, mining, and more.

What does being “legal” mean for crypto in Pakistan?

When discussing the status of crypto in Pakistan, it’s important to consider what being “legal” actually means. Pakistan’s emerging frameworks focus on virtual assets, which are a general category that includes cryptocurrencies, stablecoins, utility tokens, and other blockchain-based instruments with a transferable value used for purchases, investment, or trade. The legality varies depending on how people interact with these assets.

Legality of holding crypto in Pakistan

Individuals and businesses are legally allowed to own virtual assets in Pakistan, and offshore wallets are widely used. Pakistan has no explicit prohibition on the possession of virtual assets.

Legality of trading crypto in Pakistan

This remains an area of confusion regarding the status of crypto in Pakistan. While regulators have clarified the legality of trading cryptocurrencies, Pakistan has yet to issue any licenses for cryptocurrency exchanges, meaning platforms cannot legally operate in the country. Users typically rely on overseas exchanges, which may expose them to compliance and enforcement risks.

Legality of businesses offering crypto services

Under the new Virtual Assets Ordinance, exchanges, custodians, and other virtual asset service providers (VASPs) will eventually require authorization from PVARA. However, it has yet to issue any licenses. Until licenses are provided, most crypto-related commercial activity inside Pakistan remains unregulated or prohibited.

In practice, the Pakistan crypto environment is one where privately holding virtual assets is tolerated, but regulated crypto trading and service provision are still developing.

Suggested read: Pakistan Opens Doors to Global Crypto Firms with New Licensing Push

Is Bitcoin legal in Pakistan?

Bitcoin is extremely popular in Pakistan. As with other virtual assets, Bitcoin itself is legal to hold in a private wallet. Many Pakistani users keep their assets in offshore exchanges or self-hosted wallets.

No domestic cryptocurrency exchanges have been licensed to date, despite the existence of a legal framework for VASPs. Using local banking rails to buy or sell Bitcoin also carries the risk of exposure. Bitcoin mining is legal, though, and in general, crypto mining is not prohibited in Pakistan.

Activities that resemble commercial services (e.g., operating an exchange, providing custody, or facilitating trades) may not be legal until PVARA issues licenses.

In practice, Bitcoin is legal to hold in Pakistan, but activities such as trading, brokering, or offering Bitcoin-related services can expose individuals to legal risks.

Crypto trading in Pakistan: legality, P2P, and enforcement risks

There is no clear ban on owning virtual assets, and the regulatory framework for crypto trading is still being built. Pakistan has established a legal framework for licensing VASPs, but no domestic exchanges have yet received full operational licenses.

Many Pakistanis access crypto through:

• P2P networks: Individuals often use peer-to-peer marketplaces to trade, which are widely used but not formally regulated domestically. 
• Offshore CEXs: Users frequently trade on international centralized exchanges (CEXs), sometimes via VPNs or other workarounds, which can offer liquidity but also carry compliance and enforcement risk. 
• DEXs: Decentralized exchanges are accessible globally, but lack local consumer protections and cannot reverse errors or losses.

Important progress is underway. On December 12, 2025, PVARA issued No Objection Certificates (NOCs) to Binance and HTX, allowing them to set up local units and begin preparing full license applications under a phased, supervised entry framework. These NOCs are an initial regulatory step—not full operating licenses—and signal movement toward a regulated crypto market in Pakistan.

The NOCs allow the exchanges to establish local entities, engage with Pakistan’s AML systems, and prepare full license applications. PVARA Chairman and Pakistan’s Minister of State for Crypto & Blockchain, Bilal Bin Saqib MBE, said the clearances mark the start of Pakistan’s phased licensing process and that compliance strength will determine which exchanges are ultimately authorized to proceed, according to local news outlet Dawn.

Highlighting the country’s high crypto adoption, Saqib warned that failing to introduce appropriate policies would weaken the country and expose users to greater risk. Emphasizing a “Pakistan-first approach,” he said: “We will first control this industry and then scale it.”

Separately, Pakistan’s Ministry of Finance signed a memorandum of understanding (MoU) with Binance Investments to explore potential collaboration on the tokenisation and blockchain-based distribution of real-world and sovereign assets, including government bonds, treasury bills, commodity reserves, and other federally owned assets. The MoU envisages Binance and its affiliates providing technical expertise, advisory support, training, and capacity-building to help Pakistan assess modern, compliant blockchain infrastructure.

Enforcement risks

Banks and payment providers in Pakistan are advised by the PSB not to process any transactions linked to virtual assets. This means fiat on-ramps may be blocked or reversed, and users risk account closures if virtual asset activity is detected.

In summary, crypto trading in Pakistan operates in a legal gray area. It is not explicitly illegal, but it is not yet supported by a regulated infrastructure. Until a licensing system is operational, P2P and offshore routes dominate, and users risk enforcement and consumer-protection risks.

Suggested read: The Top 10 Crypto-Friendly Countries (2025)

Crypto mining in Pakistan: Legality and practical constraints

Crypto mining in Pakistan lies in a similar gray area to crypto trading. Crypto mining is not explicitly prohibited in Pakistan, and the government has allocated 2,000 megawatts of electricity to Bitcoin mining and AI data centers. However, no licenses have been granted yet.

Mining vs holding

While holding a virtual asset is legal, Pakistan Bitcoin mining is more complex because it involves the generation of new assets, operations often at a commercial scale, and the use of energy.

Electricity and infrastructure barriers

Even with the legality of crypto mining, practical constraints can often be as significant as legal ones. Pakistan faces recurring power shortages, regional load management issues, and high industrial tariffs, making large-scale mining economically challenging.

What “compliant mining” would likely require

In a regulated mining landscape, operators would likely need to demonstrate:

• legally sourced electricity and declared consumption
• registration as a commercial entity
• compliance with PVARA if mining is treated as a virtual-asset service
• transparency over beneficiary ownership for AML purposes

At present, while crypto mining in Pakistan is legal, it is constrained by energy limitations and regulatory uncertainty. For most, this means mining may be possible on a small scale, but commercial operations face practical and compliance hurdles.

Pakistan’s crypto ban: banned vs gray areas

The idea of a crypto ban in Pakistan persists largely because of earlier SBP directives prohibiting financial institutions from dealing with virtual assets, but the legal picture going into 2026 is more nuanced. There is no statute in Pakistan that criminalizes holding Bitcoin or other virtual assets. When people ask, “Is crypto banned in Pakistan?”, the confusion usually comes from misunderstandings about regulatory guidance rather than explicit legislation.

What is banned

• Bitcoin and other virtual assets are not recognized as legal tender, meaning they cannot be used for official payments or debt settlement.
• SBP has instructed banks and payment providers not to process crypto-related transactions, which effectively blocks domestic fiat on- and off-ramps.
• No exchange is currently licensed under PVARA, so operating a crypto business without authorization may breach financial services laws.

What falls into gray areas

• Using offshore exchanges or self-hosted wallets is not explicitly banned, but carries compliance risks if linked to local banking rails.
• Peer-to-peer trading is widespread but unregulated, creating a legal gray zone.

Enforcement in practice

Authorities focus primarily on preventing fraud, illegal fundraising, and unlicensed financial services, rather than holding virtual assets. There is no Bitcoin ban in Pakistan, for example.

In short, there is no blanket ban, but an uncertain regulatory landscape means much crypto activity operates in a legally gray area.

Pakistan crypto regulation timeline (2018–2025): How policy shifted toward licensing

Pakistan’s approach to crypto regulations has shifted significantly since 2018, moving from more restrictive central-bank directives to the beginnings of a formal licensing regime.

2018: SBP prohibitions

SBP issued BPRD Circular 03/2018 and FE Circular 03/2018, directing financial institutions not to process virtual-currency transactions. This marks the effective start of Pakistan’s “crypto ban,” driven by concerns over unregulated financial flows, fraud, and FX leakage.

2019–2022: FATF Pakistan pressure

While Pakistan was on the FATF “grey” list for increased monitoring until 2022, regulators tightened oversight of unlicensed financial activities, including those involving virtual assets. During this time, Pakistan made significant progress in its approach to AML/CFT processes.

2023–2024: FX and consumer-protection concerns

Economic instability and foreign-exchange shortages raised fears that crypto trading could worsen capital flight.

2025: Policy pivot toward crypto regulation

The government created the Pakistan Crypto Council (PCC) and introduced the Virtual Assets Ordinance, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA). This marks the first formal attempt to build a framework for VASPs in Pakistan, which we will discuss in the following section.

Overall, as virtual assets have entered the mainstream around the world, many countries, including Pakistan, have introduced new regulatory frameworks to provide more protection in this emerging sector rather than banning it. Pakistan’s moves are part of a broader move from ad-hoc restrictions to regulated oversight.

Suggested read: KYC vs AML: Complete Global Guide to Key Differences and Best Practices (2025-26)

Pakistan’s Virtual Assets Ordinance 2025 and PVARA: How regulation is supposed to work

Pakistan’s new framework for virtual assets is anchored in the Pakistan Virtual Assets Ordinance 2025, promulgated on July 8, 2025. As an ordinance, it is a temporary law, initially valid for 120 days and extended by the Senate for another 120 days while Parliament considers turning it into a full Act. 

The ordinance creates the Pakistan Virtual Assets Regulatory Authority (PVARA) as an independent federal regulator. PVARA’s 11-member board includes the SBP Governor, heads of SECP, FBR, and the Digital Pakistan Authority, key federal secretaries, the FIA Director General, and two independent directors, signaling that PVARA Pakistan is designed as a whole-of-government oversight body for virtual assets.

Substantively, the ordinance defines “virtual assets” as digital representations of value that can be traded or transferred and used for payment or investment, while explicitly stating they are not legal tender. It mandates PVARA to license, regulate, and supervise virtual asset service providers (VASPs), including exchanges, brokers, custodians, and advisory services.

All entities offering virtual-asset services in or from Pakistan must obtain a licence from PVARA, which will publish a public register of authorized firms and issue detailed regulations and guidelines. 

Pakistan crypto tax readiness

Pakistan has not yet issued a dedicated framework for crypto tax in Pakistan, but the introduction of PVARA signals that tax authorities will eventually expect clearer reporting from individuals and VASPs. Until rules are formalized, users can prepare by maintaining verifiable records that align with global best practices and Pakistan’s existing income tax and AML requirements.

Crypto exchanges and banking in Pakistan

Although crypto exchanges may operate in theory, none have yet been licensed or formally authorized under Pakistan’s PVARA framework. For now, this leaves users dependent on offshore platforms or decentralized protocols, each with different legal and practical implications.

CEX Pakistan reality

Many Pakistani users access foreign centralized exchanges through offshore accounts. While this is possible, it is not formally authorized. The question “Is Binance legal in Pakistan?” has no simple answer: Binance is not banned for individual use, but it is not licensed to operate in or from Pakistan. This means that users rely on the platform at their own risk and may face account restrictions or enhanced verification requirements.

DEX Pakistan alternatives

While decentralized exchanges remain accessible, they operate outside any Pakistani regulatory perimeter. There is no consumer protection, no dispute resolution, and no oversight of smart-contract risk.

Banking and payments layer

Access to traditional banking and payment rails remains limited for crypto-related activity in Pakistan. While a formal licensing framework under PVARA is still being implemented, no regulated on- or off-ramps have been authorized yet, which constrains seamless integration between crypto platforms and the local financial system.

As a result, most crypto activity currently relies on offshore exchanges, peer-to-peer arrangements, or decentralized platforms, operating largely outside Pakistan’s regulated banking environment. This is generally viewed as a transitional phase, as authorities move toward a licensed and supervised model for crypto-related services.

FAQ

• Is crypto legal in Pakistan?

  Whether crypto is legal in Pakistan depends on the activity. Holding virtual assets is allowed, but trading and providing services remain unregulated because no exchange is licensed under PVARA. Banks are still barred from processing crypto-related transactions.

• Is Bitcoin legal in Pakistan?

  Yes, owning Bitcoin is legal in Pakistan, but using it for trading or commercial services remains uncertain under current rules. As exchanges are not yet licensed in Pakistan, most activity takes place through offshore platforms or P2P networks.

• Is crypto mining legal in Pakistan?

  While Pakistan has no explicit law banning or authorizing crypto mining, it has allocated 2,000 megawatts of electricity to Bitcoin mining and AI data centers. Small-scale mining is possible, but large-scale operations face energy constraints and unclear regulatory treatment until PVARA issues detailed guidelines.

• Which bank allows cryptocurrency in Pakistan?

  No bank in Pakistan is permitted to process crypto transactions. SBP’s directives require banks and payment providers to avoid handling virtual-asset activity until a licensed framework is in place.

• How to start crypto trading in Pakistan?

  Because domestic exchanges are not licensed, most users in Pakistan rely on offshore platforms, P2P marketplaces, or DEXs. Each option carries compliance, fraud, and banking-related risks, so users should keep detailed records and understand that these activities operate outside regulated oversight.

• Which crypto exchange is best in Pakistan?

  Pakistan has no legally licensed crypto exchange at present. Users typically choose offshore platforms based on liquidity, security, and verification requirements. However, these services often operate without domestic regulatory protection.