Pakistan: From a Seven-Year Ban to a Licensed Market in Under a Year
Operating a crypto ATM in Pakistan moved from outright prohibition to a defined legal pathway in less than twelve months. The Virtual Assets Act 2026 created a dedicated regulator — the Pakistan Virtual Assets Regulatory Authority (PVARA) — the central bank lifted its blanket ban on banking services for crypto businesses, and Pakistan now ranks among the world’s top three countries for crypto adoption. For operators, the opportunity is real but conditional: operating a crypto ATM qualifies as a Virtual Asset Service Provider (VASP) activity and requires a PVARA licence. The framework exists on paper, but as of mid-2026 several implementing rules — licence fees, minimum capital, and ATM-specific conduct standards — were still unpublished.1
Last updated: June 2026
From Prohibition to a Statutory Framework
For years the State Bank of Pakistan (SBP) barred banks and financial institutions from dealing in virtual currencies, leaving crypto in a legal grey zone despite massive grassroots use. The turning point came on 8 July 2025, when the President promulgated the Virtual Assets Ordinance 2025, a temporary measure that first constituted PVARA. The Ordinance was then replaced by a permanent statute: the Senate passed the Virtual Assets Bill on 27 February 2026, the National Assembly on 3 March 2026, and President Asif Ali Zardari signed it into law as the Virtual Assets Act 2026. 1,2
PVARA is an autonomous federal regulator, constituted as a body corporate under the Act with licensing, supervisory and enforcement powers. The law defines virtual assets broadly — covering Bitcoin, Ethereum, stablecoins, NFTs and tokenised securities — and explicitly subjects exchanges, custodians, token issuers and other service providers to licensing. Crucially for an ATM business, crypto ATMs fall squarely within the VASP definition and therefore require a licence. Virtual assets are not legal tender: a person may now lawfully hold and transfer crypto, but cannot use it to pay for goods at retail. Operating an unlicensed VASP carries fines of up to PKR 50 million and imprisonment of up to five years.1,8
Getting Licensed: A Real but Unfinished Pathway
The gateway clearance is the No Objection Certificate (NOC) under Section 19 of the Act. Before incorporating a company to provide virtual asset services, an applicant must first obtain an NOC from PVARA, which the Authority may grant (with or without conditions) or refuse with written reasons. The applicant must be a company registered in Pakistan under the Companies Act 2017, meet a minimum paid-up capital set by licence category, and ensure directors and key personnel pass “fit and proper” checks. Applicants must also stand up full KYC, transaction-monitoring and suspicious-activity-reporting systems, cybersecurity controls, and business-continuity arrangements.4,5
PVARA opened the process by inviting global firms to apply in September 2025, stipulating that applicants already be recognised in a major jurisdiction such as the United States, the European Union or Singapore. Binance and HTX received NOCs in December 2025, with further exchanges entering the regulatory sandbox — a controlled-testing pathway under Sections 42–45 — or the application pipeline through 2026. VASPs already operating at the Act’s commencement were given six months to apply for a licence or cease operations.5,6
The unfinished part matters. As of mid-2026 PVARA had not published the detailed fee schedule, minimum capital thresholds, professional-indemnity requirements or ATM-specific conduct rules; these are expected in the forthcoming full licensing regulations. The distinction is favourable: selling ATM hardware and operating software is not itself a licensable activity — it is the in-country party operating the machines who must hold the PVARA licence, the same model that applies across most markets on our legislation map.5
AML and KYC: Off the Grey List, Still Watched
Pakistan was removed from the FATF grey list in October 2022 after substantial improvements to its anti-money-laundering and counter-terrorist-financing (AML/CFT) framework, and has since remained under follow-up monitoring. FATF has cautioned that removal does not make the country immune to money-laundering or terror-financing risk. The Virtual Assets Act builds global AML/CFT standards directly into licensing: VASPs must perform full customer due diligence, monitor transactions, and file suspicious transaction reports with the Financial Monitoring Unit (FMU), Pakistan’s financial intelligence unit.7
Specific numeric thresholds for crypto-ATM transactions had not been published as of mid-2026. In practice, because every transaction runs through a licensed VASP, full customer identification would be required — effectively eliminating anonymous use. Operators should design for full KYC at the machine from day one rather than assume a no-verification tier.12
Banking: The Door Just Opened
The most consequential recent change for an ATM operator is on the banking side. The SBP had long prohibited banks from servicing crypto activity, which historically starved the sector of fiat rails. In April 2026 the central bank lifted that blanket ban, allowing banks and financial institutions to serve licensed crypto firms — while still barring banks from trading, investing in, or holding crypto with their own funds or customer deposits.3
This is a materially easier environment than sanctioned or financially isolated jurisdictions: Pakistan is off the FATF grey list, has a functioning (if conservative) banking system, and is integrated into international correspondent banking. The practical caveat is timing — bank appetite for crypto-business accounts is still nascent and will firm up only as PVARA’s full licensing regime and the banks’ own onboarding policies mature. An operator should secure banking arrangements in parallel with, not after, the licensing process.3
The Next 24 Months: Institutional Push Meets IMF Caution
State-level momentum is unusually strong. The government launched the Pakistan Crypto Council under the Ministry of Finance on 14 March 2025, unveiled a government-led Strategic Bitcoin Reserve in May 2025, and announced an allocation of 2,000 MW of surplus electricity for Bitcoin mining and AI data centres. The counterweight is the IMF, which rejected the proposal to subsidise electricity for mining, citing market distortion and strain on the power sector — a reminder that fiscal and external-financing constraints will temper how fast crypto policy can move.10,11
The demand base is undeniable. Pakistan ranked third in Chainalysis’s 2025 Global Crypto Adoption Index, behind only India and the United States, with an estimated 15–18 million users. Adoption is driven by 25%-plus inflation pushing savings into stablecoins such as USDT, heavy freelance remittance flows, and entrenched peer-to-peer trading. Over the next 12–24 months the realistic trajectory is publication of PVARA’s full licensing regulations (fees, capital, conduct standards), additional exchange licences beyond the initial NOCs, and a likely crypto-taxation framework.8,9
Pakistan is a genuine medium-term market rather than a near-term turnkey one. The recommended path: identify a licensed local operating partner (or one committed to the NOC process), treat the Section 19 NOC as the first gating step, and hold deployment until PVARA publishes the full licensing regulations and the operator’s banking relationship is confirmed. Selling the hardware can proceed in parallel, with delivery and go-live aligned to the operator’s licence.12
Sources and references:
1. Legal framework — PVARA · DAWN: Senate passes Virtual Assets Bill
2. Passage of the Act — CCN · The Block · Deccan Herald · ProPakistani
3. Banking ban lifted — CoinDesk (15 April 2026)
4. NOC & licensing architecture — PVARA NOC Regulations 2025 (PDF) · ABS & Co
5. Licensing requirements & status — ComplyFactor · CoinConnect
6. Regulatory sandbox (Sections 42–45) — startup.pk
7. FATF grey-list exit & monitoring — Ministry of Foreign Affairs · FATF country page · IFAC case study
8. Act provisions, penalties, market size — Bitget News · Blockonomi
9. Adoption data — Chainalysis 2025 Global Crypto Adoption Index
10. Crypto Council, Bitcoin reserve, mining — Pakistan Crypto Council (Wikipedia) · Cointelegraph
11. IMF objection to mining subsidy — Outlook Business
12. Country overview — Sumsub: Crypto in Pakistan 2026
Legal Disclaimer: This article by GENERAL BYTES is for informational purposes only and does not constitute formal legal, financial, or investment advice. Pakistan’s virtual-asset regulatory framework is new and key implementing rules remain unpublished; always consult specialised local legal counsel and confirm the current PVARA requirements before considering market entry.