Every fee a licensee pays to the Pakistan Virtual Assets Regulatory Authority (PVARA) — the No Objection Certificate (NOC) fee, the licensing fee, a renewal charge, a fine for a contravention — goes somewhere. Section 14 of the Virtual Assets Act 2026 answers that question directly: it establishes the Pakistan Virtual Asset Regulatory Authority Fund, a dedicated pool of money that funds everything the Authority does.
Understanding the Fund is not just an accounting curiosity. It tells you how PVARA is meant to be resourced, what its money can and cannot be spent on, and how its accounts are checked. For a licensee, it also explains where the fees in your licensing framework actually end up.
What is the PVARA Fund?
Section 14(1) of the Act establishes “a lapsable fund, vested in and administered and controlled by the Authority, to be known as the Pakistan Virtual Asset Regulatory Authority Fund, for meeting expenditures in connection with the performance of the functions and operations of the Authority under this Act.”
The word “lapsable” matters. A lapsable fund does not automatically carry forward an unlimited balance year to year in the way a permanent endowment might — its operation is governed by the Public Finance Management Act, 2019, which section 14(2) expressly makes the Fund subject to. In practice, this ties PVARA’s financial management to the same public finance discipline that applies across the Federal Government, rather than leaving the Authority to manage a wholly independent treasury.
What are the eleven sources of money that feed the Fund?
Section 14(2) lists eleven distinct sources of revenue for the Fund, lettered (a) through (k). They span direct government funding, borrowing, donor support, and money PVARA generates from its own regulatory activity.
| Ref | Source |
|---|---|
| 14(2)(a) | Funds from the Federal Government for salaries, infrastructure, administrative and operational expenses |
| 14(2)(b) | Loans or funds from the Federal Government, a Provincial Government, a local authority or any other entity, with Authority approval |
| 14(2)(c) | Grants made by the Federal Government |
| 14(2)(d) | Aid, grants, donations or loans from domestic and international agencies |
| 14(2)(e) | Contributions from multilateral organisations, international agencies and philanthropic organisations |
| 14(2)(f) | Sums or property becoming payable to or vested in the Authority through its powers or functions |
| 14(2)(g) | Income from the Authority’s own investments and assets |
| 14(2)(h) | NOC, licensing, supervision, renewal or other fees |
| 14(2)(i) | Penalties, fines, settlements and other recoveries |
| 14(2)(j) | Charges for services rendered, including sandbox participation |
| 14(2)(k) | Any other source prescribed |
Two of these sources deserve particular attention if you are a licensee or applicant. Section 14(2)(h) is the fee line every applicant pays into directly — every no objection certificate application, every full licence, every renewal. Section 14(2)(i) is where enforcement outcomes land: a fine imposed under section 59’s administrative sanctions regime becomes part of the same Fund that pays PVARA’s own operating costs.
Where do sandbox fees and service charges fit in?
Section 14(2)(j) specifically names “charges for services rendered by the Authority, including sandbox participation and other prescribed services” as a Fund source. This connects directly to section 9(2)(k), the power to operate a regulatory sandbox — sandbox participation is not necessarily free, and any fee charged for it is a recognised revenue stream for the Fund under the Act.
Section 14(2)(d) and (e), by contrast, open the door to donor and multilateral financing — aid, grants and contributions from bodies such as international development agencies. Section 14(2)(e) requires these to be “managed in accordance with regulations ensuring transparency and good governance,” which signals that donor-funded activity is expected to carry its own accountability layer distinct from ordinary government appropriations.
What are the nine things the Fund can actually be spent on?
Section 14(5) sets out nine permitted uses of the Fund, lettered (a) through (i). Money in the Fund can only be spent for these purposes — it is not a general-purpose account.
- (a) any expenditure lawfully incurred by the Authority;
- (b) salaries and remuneration for the Chairperson, Managing Director, officers, employees, consultants and advisers;
- (c) other expenses, costs or expenditures properly incurred or approved by the Authority;
- (d) purchasing or hiring equipment and machinery, acquiring land, constructing buildings, and other works connected with its functions;
- (e) repayment of loans or advances obtained under the Act, with any associated interest, charges or fees;
- (f) meeting financial obligations or liabilities arising from the performance of its functions;
- (g) funding strategic and enabling projects to support the Act’s objectives or enhance operational capabilities;
- (h) expenses relating to investigations, inspections, enforcement actions, legal proceedings, arbitration, mediation and dispute resolution, including court and expert fees; and
- (i) capacity-building, research, training, certification and international cooperation activities, including participation in regional or international regulatory forums.
Item (h) is the one worth flagging for anyone facing enforcement action: PVARA’s own investigation and litigation costs are funded from the same pool that includes the fines and fees paid by the market it regulates. Item (b) confirms that the Authority’s staffing power — sanctioning posts, hiring staff and consultants, and taking on seconded officials — is financed directly through the Fund.
Who checks PVARA’s own accounts?
Section 15 governs the Authority’s budget, finance and audit cycle. Under section 15(1), PVARA prepares and approves its own budget each financial year, following a procedure prescribed through Rules. Section 15(2) requires the budget statement to specifically state estimated receipts and expenditure, and the sums required from the Federal Government for the coming year. Section 15(3) requires complete and accurate books of account.
The audit itself is external and dual-layered. Under section 15(4), “at the end of each financial year, the accounts of the Authority shall be audited by the Auditor General of Pakistan and by a firm of Chartered Accountants nominated by the Auditor General of Pakistan.” Section 15(5) requires PVARA to produce whatever accounts, books, documents and explanations the auditors require. Section 15(6) requires copies of the auditor’s report to be provided to the Authority.
Section 15(7) then adds a public accountability step: PVARA must submit an annual report on the Fund to the Prime Minister, through the Division concerned, within ninety days of the close of each financial year, including audited financial statements and performance against approved objectives. This connects to section 72’s broader requirement that the annual report be laid before the Majlis-e-Shoora (Parliament) within ninety days and placed on PVARA’s website once tabled.
Does the Fund’s structure affect me as an applicant or licensee?
Yes, in two practical ways. First, the fees you pay under section 14(2)(h) — for an NOC, a licence, supervision or renewal — are not incidental charges; they are a statutory revenue source that Parliament expects to see accounted for in PVARA’s audited annual report. Second, the lapsable nature of the Fund under section 14(1), tied to the Public Finance Management Act, 2019, means PVARA’s operating capacity in any given year depends partly on Federal Government allocations under section 14(2)(a) and (c), not solely on fee income — a factor that can influence how quickly a young regulator scales its review and supervisory capacity.
For a company weighing its own corporate setup and tax and banking arrangements alongside a PVARA application, the Fund structure is a reminder that licensing fees are not a formality — they are one of eleven named pillars supporting the regulator’s own budget, audited annually and reported to Parliament.
About this analysis
This analysis was prepared by the CoinConnect research desk from the Virtual Assets Act 2026 as passed by the National Assembly — principally sections 14 and 15, with cross-references to sections 9, 13, 59 and 72 — read as published. Where practice is not yet settled or guidance has not been issued, that is stated in the text above.
Regulatory positions change and specific requirements should be verified against the current position published by the relevant authority before you act on them. This is information and analysis, not legal advice, and it does not create an advisory relationship. Take professional advice on your own circumstances.
Entering Pakistan's crypto market?
CoinConnect handles market entry, partnerships, PR and launch for exchanges and Web3 companies moving into Pakistan and South Asia.
Visit CoinConnect