TL;DR
- Pakistan now allows banks to provide services to licensed crypto firms, ending an eight-year restriction on virtual asset activity.
- The reform follows the Virtual Assets Act 2026, which establishes a formal regulatory structure and introduces oversight through a dedicated authority.
- Banks can support operations but cannot trade or hold crypto themselves, ensuring a controlled environment while opening the door to institutional participation and fintech growth.
Pakistan has shifted its stance on digital assets by allowing banks to work with licensed crypto businesses, a move that reflects a broader change in regulatory thinking. The decision enables financial institutions to offer accounts and payment services to approved firms, replacing a policy that had effectively isolated the sector since 2018.
Pakistan has taken an important step toward formalising its virtual asset ecosystem.
Following the enactment of the Virtual Assets Act, 2026, the State Bank of Pakistan has issued BPRD Circular Letter No. 10 of 2026, enabling regulated entities to open and maintain bank accounts… pic.twitter.com/cuUhwSiCfS
— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) April 14, 2026
Pakistan Crypto Policy Enters A New Phase
The State Bank of Pakistan confirmed that banks can now onboard entities licensed by the Pakistan Virtual Assets Regulatory Authority. This update follows the approval of the Virtual Assets Act 2026 in March, which outlines licensing, compliance, and supervisory mechanisms for the industry.
Authorities had already shown signs of engagement in recent months, holding talks with major exchanges such as Binance and HTX. These discussions suggested an interest in attracting international platforms while maintaining regulatory oversight. At the same time, policymakers explored blockchain applications, including stablecoins for cross-border payments, aiming to modernize financial infrastructure and reduce transaction friction.
Banking Access Under Strict Compliance Rules
The new framework draws a clear boundary between service provision and direct exposure. Banks are not allowed to invest in or hold virtual assets, whether using their own capital or customer deposits. Their role remains limited to facilitating transactions and providing infrastructure.
To ensure transparency, institutions must create separate accounts for client funds, known as Client Money Accounts, denominated in Pakistani rupees. These accounts must remain segregated from company funds, preventing any mixing of assets. In addition, banks are required to apply enhanced due diligence procedures, update risk models, and continuously monitor transactions linked to crypto firms.
Regulators also mandate reporting of suspicious activity to the Financial Monitoring Unit, reinforcing anti-money laundering and counter-terrorism financing standards. This layered approach signals that oversight remains central even as access expands.
Pakistan’s decision aligns with a global trend toward regulated crypto adoption rather than outright bans. By allowing banks to support licensed firms while enforcing strict controls, the country positions itself to capture innovation without abandoning financial safeguards.
