ISLAMABAD: The Senate on Friday passed a bill, seeking to establish a regulatory authority for the licensing, regulation and supervision of virtual assets in the country to align with global efforts to regulate virtual assets.
The proposed legislation provides for the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA), which will be an autonomous corporate body empowered to license, regulate and supervise virtual asset service providers in Pakistan.
The relevant rules were suspended to take up the virtual assets authority bill, which was moved in the House by Finance Minister Muhammad Aurangzeb, for immediate consideration and adoption.
The autonomous body will supervise the virtual asset economy, ensure compliance with global anti-money laundering standards, and support financial innovation through regulatory sandboxes, as Pakistan’s virtual asset market has been operating without proper oversight, raising concerns about money laundering and financial crime.
The authority will introduce a structured licensing regime for firms offering services related to crypto-currencies, digital tokens, and block chain-based assets in or from Pakistan. Moreover, the regulator will also establish a Virtual Assets Appellate Tribunal (VAAT) to handle disputes and ensure transparency, compliance as well as financial integrity.
This initiative is in alignment with global efforts to regulate virtual assets, as seen in countries like the United Arab Emirates, Singapore, India, and the European Union. Pakistan’s finance minister has emphasized the government’s commitment to promoting responsible adoption of virtual assets and strengthening the financial system against illicit activities.
The regulatory authority will be empowered to protect customers and investors dealing in virtual assets by establishing and enforcing appropriate safeguards and conduct of business requirements.
The Statement of Objects and Reasons of the Bill reads that the virtual assets, “being an evolving component of the modern financial ecosystem, necessitate a dedicated regulatory authority for licencing and supervision of virtual asset service providers, with the aim to ensure investor protection, transparency and market integrity”.
According to the statement, the regulatory body will ensure investor protection, foster innovation, and promote transparency in the virtual asset market and will also create an enabling environment for safe trading, prevent illegal activities like money laundering and fraud, and enhance global competitiveness, the statement adds.
It explains, “Therefore, a corresponding legal framework, empowering the authority, is also required to combat money laundering, terrorist financing, and other illicit activities while promoting innovation, financial inclusion, economic growth and development of Shariah compliant virtual asset services aligned with international standards”. The Senate will now meet on Monday afternoon.
