The State Bank of Pakistan (SBP) has permitted banks and financial institutions to open accounts for licensed virtual asset service providers (VASPs), marking a significant shift in the country’s approach to digital assets and crypto currencies.
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The move follows the enactment of the Virtual Assets Act, 2026, under which the Pakistan Virtual Asset Regulatory Authority (PVARA) has been established to oversee licensing, regulation and supervision of virtual asset activities. Analysts say the development could help channel crypto-related investments into the formal banking system and potentially boost capital inflows.
🇵🇰 Pakistan has lifted its 8-year crypto banking ban, allowing banks to provide services to digital asset firms for the first time since 2018.
Under new rules from the State Bank of Pakistan, banks can now work with registered crypto companies (VASPs), but cannot trade or hold… pic.twitter.com/SpUWofQzbS
— Traders Paradise (@theparadiselive) April 16, 2026
In its latest circular, the central bank clarified that financial institutions must independently verify the validity of PVARA licences before offering services to any VASP. Only entities with proper licensing will be granted full banking access, while those operating under no-objection certificates may receive limited services.
The SBP has also made it mandatory for banks to maintain separate Pakistani rupee-denominated client money accounts for VASP transactions. These accounts must be strictly segregated from the company’s own funds, with a complete prohibition on commingling or using such funds as collateral.
Despite the relaxation, strict compliance requirements remain in place. Banks will continue to follow anti-money laundering (AML) and counter-terrorism financing regulations, including enhanced due diligence, risk assessments and reporting of suspicious transactions to the Financial Monitoring Unit.
The decision effectively reverses earlier guidance issued in 2018, when the SBP had discouraged financial institutions from dealing with cryptocurrencies. Experts believe the updated framework reflects a more structured and regulated approach, aligning Pakistan with global trends in digital finance oversight.
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Financial analysts note that integrating crypto businesses into regulated banking channels could improve transparency, attract foreign investment and strengthen oversight, while ensuring that risks associated with digital assets remain controlled under a formal regulatory regime.