Pakistan Launches Crypto Sandbox to Test Stablecoins and Tokenization

Edgen Crypto

·Feb 20 2026, 21:25

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Key Takeaways

Pakistan's Virtual Asset Regulatory Authority (PVARA) has officially launched a regulatory sandbox, signaling a significant move toward formalizing the country's digital asset ecosystem. The supervised testing environment, approved on February 20, 2026, will focus on key financial technologies and aims to establish a clear framework for the growing industry.

Regulatory Green Light: PVARA formally approved a supervised sandbox to test stablecoins, tokenization, and digital asset infrastructure.
Structured Testing: The sandbox will evaluate the viability and security of remittances and on/off-ramp solutions for digital assets.
Potential Economic Impact: This initiative is expected to attract foreign investment, encourage local innovation, and pave the way for wider crypto adoption in Pakistan.

Pakistan Greenlights Digital Asset Sandbox on February 20

Pakistan's Virtual Asset Regulatory Authority (PVARA) took a decisive step towards integrating digital assets into its financial system by formally approving a supervised regulatory sandbox on February 20, 2026. The initiative creates a controlled environment for companies to test innovative financial products and services under the regulator's oversight. The sandbox's primary focus includes evaluating stablecoins, the tokenization of assets, and critical infrastructure such as digital asset on- and off-ramps.

Framework Aims to Attract Investment and Innovation

By establishing this formal testing ground, Pakistan signals a move away from regulatory ambiguity and towards creating a structured framework for the crypto industry. The sandbox is designed to de-risk innovation, providing a clear pathway for businesses to develop and deploy new technologies related to digital remittances and asset management. This move is widely seen as a foundational step to legitimize the local crypto market, which could attract significant foreign investment and spur domestic technological development. For investors, the creation of a regulated environment reduces uncertainty and may unlock new opportunities within one of Asia's key emerging markets.