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Pakistan passed its first crypto law. President Zardari signed the Virtual Assets Act 2026 after the Senate cleared it on February 27 and the National Assembly on March 3. PVARA is now a permanent federal regulator with powers to license exchanges, jail unlicensed operators for up to five years, and shut down unauthorized token offerings. The headlines write themselves. But the headlines are wrong about what this is actually for.
This isn’t about legalizing Bitcoin trading. Pakistan already has an estimated 30 to 40 million crypto users, per CoinPedia citing PVARA data. It ranks among the top countries globally in adoption. All of that activity happened without a legal framework, against a backdrop of restrictions dating back to a 2018 State Bank of Pakistan directive that banned financial institutions from touching crypto. Nobody stopped trading. They just did it through VPNs and peer-to-peer channels.
What changed is the money this is really about.
$38 Billion a Year. Through Banks.
Pakistan received roughly $38 billion in formal remittances in the last fiscal year ending June 2025, per Nikkei Asia citing State Bank of Pakistan data. That’s larger than the country’s total export earnings of $32 billion. Remittances account for 9.4% of GDP, per the World Bank’s 2024 figures. Saudi Arabia alone sends $7.4 billion a year. The UAE sends $5.5 billion. The UK sends $4.5 billion. These flows are what keep the current account above water. Without them, Pakistan’s balance of payments collapses.
But those are just the formal numbers. Running alongside the banking system is the hawala network, an informal value transfer system that has operated across South Asia and the Gulf for centuries. Current estimates of hawala flows into Pakistan range from $4 to $6 billion annually, per a Newswire analysis published in October 2025. The Express Tribune reported that transfer costs through formal channels run between 5% and 7%, which is exactly the kind of margin that pushes users toward informal alternatives. The IMF, in its staff report after the second review of Pakistan’s $7 billion bailout programme, told Islamabad to cut its remittance incentive spending and instead reduce the cost of cross-border payments. Per Nikkei Asia, analysts warned that cutting incentives without offering cheaper alternatives would push flows back into hawala.
That’s the gap the Virtual Assets Act is designed to fill. Not crypto speculation. Remittance infrastructure.
The World Liberty Play
In January 2026, Pakistan signed a memorandum of understanding with an affiliate of World Liberty Financial, the Trump-linked crypto venture, to explore stablecoin infrastructure for cross-border payments, per CoinPedia and Arab News. That’s not a random bilateral. It’s a direct play on stablecoin rails replacing traditional remittance corridors. If a Pakistani worker in Riyadh can send USDT to a regulated wallet in Lahore and cash out through a licensed PVARA exchange at near-zero fees, the 5-7% bank fee disappears. So does the incentive to use hawala.
PVARA has already issued No Objection Certificates to Binance and HTX, per The Block, allowing both exchanges to begin AML registration and incorporate local subsidiaries while preparing full license applications. Neither is operational yet. But the plumbing is being laid. The regulator launched a regulatory sandbox in February 2026 for companies to test tokenization, stablecoins and remittance products under supervision. Applicants must already hold recognition from a major jurisdiction like the US, EU or Singapore. They also need to satisfy Shariah compliance requirements evaluated by an Islamic finance advisory committee. That last part makes Pakistan one of the first countries in the world to formally integrate Islamic finance principles into crypto regulation.
The Energy Angle Nobody Expected
Pakistan also announced it’s allocating 2,000 megawatts of surplus electricity for Bitcoin mining and AI data centers, per CoinPedia and Blockonomi. The country has chronic energy surplus in certain regions and chronic shortage in others. Routing excess capacity into mining is the kind of move that turns a liability into a revenue stream. It doesn’t solve Pakistan’s grid problems, but it creates a new export product: hashrate.
On top of that, Pakistan announced plans for a strategic Bitcoin reserve. Details are thin. But the direction is clear: Islamabad is building a full-stack crypto infrastructure play. Regulation, mining, reserves, stablecoin corridors, licensed exchanges. This isn’t a country dipping its toes. This is a country that looked at its $38 billion remittance dependency and its $4-6 billion hawala problem and decided the banking system alone can’t fix it.
The Speed
The timeline is what makes this different from every other emerging market crypto framework. PVARA was created by presidential ordinance in July 2025. That ordinance was temporary, set to lapse in early March 2026. The government rammed the Virtual Assets Act through both chambers in under a week to make it permanent before the clock ran out. Bilal bin Saqib, PVARA’s chairman, said the law was “built for the 100 million young Pakistanis who deserve a financial system that works for them,” per Blockonomi. In a separate interview with CryptoTimes, he described the legislation as converting years of unregulated activity into a structured, transparent ecosystem.
From a 2018 banking ban to a presidential ordinance in July 2025 to a permanent Act of Parliament in March 2026. Eight months from the first regulatory body to a full statutory framework. India still doesn’t have one. The UK is still consulting. The EU took four years to get MiCA across the finish line. Pakistan went from prohibition to Binance preparing a local subsidiary in under a year. Whatever you think about the execution risk, the speed is real.
The $38 billion is what makes this work or not. If stablecoin rails capture even 10% of formal remittances and pull a meaningful share out of hawala, Pakistan becomes the case study every developing country with a diaspora looks at. If the licensing framework gets bogged down in bureaucracy and Binance walks, it becomes another press release.
Plan accordingly.
For a complete timeline of how the Iran war reshaped global markets, see our reference page.
