WIOSNA's Response to Pakistan's Virtual Asset Regulations, 2026
Michael Borowiec · Saad Ahsan
"One declaration. Four regulators. No forced surrender of keys."
WIOSNA · PVARA Response
Pakistan is opening its Virtual Asset market to licensed participants across all ten categories, with a clear pathway for banks and custodial institutions. This is a meaningful step that could accelerate VASP growth while anchoring it in local solutions.
WIOSNA has submitted its formal response to the Pakistan Virtual Asset Regulatory Authority (PVARA) on the draft Virtual Asset Services Regulations, 2026.
Over the past several months, we have been advising top global banks on potential entry into Pakistan. PVARA's openness during the 24 June consultation and the speed of this draft sent a clear signal: Pakistan is building a framework that is proportionate, FATF-aligned, and serious about client asset protection.
The foundation is strong. To move from draft to deployment, the market now needs two practical enablers.
Enabler One
What do banks need to join Pakistan's virtual asset market?
Figure 01 · Bank Participation Gap
What sits in the overlap
- 01Fit-and-proper passporting
- 02Capital treatment for bank-owned VASP subsidiaries
- 03Unified cyber reporting window
WIOSNA recommends a single joint PVARA · SBP guidance note to close this gap.
wearewiosna.com
Pakistan VAS Regulations · 2026 Response
Banks joining Pakistan's virtual asset market need one joint guidance note from PVARA and the State Bank of Pakistan explaining how the two regulators' rules fit together for bank participation.
Several banks we are advising are ready to engage. The framework creates space for them, but practical questions remain at the intersection of PVARA's new mandate and SBP's prudential authority.
Our recommendation: a single joint PVARA · SBP guidance note covering fit-and-proper passporting, capital treatment for bank-owned VASP subsidiaries, and a unified cyber reporting window. This is not red tape, it is the lubricant that lets top institutional capital and compliance infrastructure flow in and partner with Pakistani VASPs.
Enabler Two
How can self-custody work under Pakistan's virtual asset rules?
Figure 02 · Wallet Declaration Mechanism
Origin
Wallet declaration
Signed message · Verified identity
Tap any regulator to see its role in the mechanism.
One declaration. Four regulators. No forced surrender of keys.
wearewiosna.com
Pakistan VAS Regulations · 2026 Response
Self-custody can work under Pakistan's framework through a voluntary wallet declaration: users prove control of a wallet and register it to a verified identity, without surrendering their keys.
The framework rightly prioritises traceability. However, miners, cross-border freelancers, and long-term holders who self-custody by conviction, not evasion, need a way to operate inside the perimeter.
We proposed a voluntary wallet declaration mechanism: cryptographic proof of control, registered to a verified identity, and shared across PVARA, FBR, FMU, and SECP. One declaration. Four regulators. No forced surrender of keys. It gives regulators the visibility they need while preserving user autonomy.
The Ask
What must Pakistan finalise before the framework goes live?
01
Joint PVARA · SBP guidance on bank participation
A coordinated note covering fit-and-proper passporting, capital treatment, and cyber reporting.
02
A signed-message standard for self-custody declarations
Cryptographic proof of control, one submission, shared across four regulators.
03
Finalised Professional Client thresholds and a firm commencement date
Certainty for institutional participants planning market entry.
Pakistan's draft is already one of the more credible frameworks in the emerging-market space. With these three pieces in place, it can become genuinely functional, for international institutions and for the indigenous exchanges, custodians, and fintechs that will shape Pakistan's Virtual Asset economy.
WIOSNA looks forward to contributing further to PVARA's stakeholder briefings.
Contact: michael@wearewiosna.com · saad@wearewiosna.com
Frequently Asked Questions
What should Pakistan change in its 2026 virtual asset regulations?
WIOSNA's response asks for joint PVARA and SBP guidance so banks can participate in the virtual asset market, and a compliant path for self-custody rather than an outright restriction.
Can banks in Pakistan participate in the virtual asset market?
Not clearly yet. PVARA and SBP mandates overlap, and the response argues banks need explicit joint guidance from both regulators before they can engage.
Is self-custody allowed under Pakistan's draft regulations?
The draft is ambiguous. WIOSNA's response proposes a compliant self-custody path with wallet declaration, rather than forcing all holdings through custodians.