Pakistan’s central bank has formally reversed its long-standing ban on banking services for cryptocurrency firms, allowing regulated banks to open accounts for licensed virtual asset service providers (VASPs) under a new legal framework.
The decision, announced in a circular by the State Bank of Pakistan and reported by Reuters, follows the enactment of the Virtual Assets Act 2026 and marks the country’s first structured move to integrate digital asset businesses into its formal financial system.
“This is a foundational step in bringing virtual assets into the formal financial system of Pakistan,” said Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority, in an official statement.
Under the new rules, banks can provide basic financial services to crypto firms, but must first verify that the entities are licensed by PVARA. Strict safeguards have been put in place to mitigate financial risks and ensure compliance with anti-money laundering (AML) and counter-terrorism financing standards.
Banks are required to conduct full due diligence, maintain updated risk profiles for VASP clients, and report suspicious transactions to regulators.
They must also ensure that client funds are held in segregated, non-interest-bearing accounts denominated in Pakistani rupees. The commingling of customer and company funds is strictly prohibited.
Pakistani banks still can’t invest in bitcoin or crypto
However, the central bank has drawn a firm line on direct exposure to digital assets. Banks are explicitly barred from investing in, trading, or holding cryptocurrencies using either their own capital or customer deposits. Their role is limited to facilitating payment rails and custody of fiat funds tied to licensed crypto activity.
The move represents a sharp reversal from Pakistan’s 2018 policy, which effectively cut off crypto firms from the banking system and stifled industry growth. With the new framework in place, authorities are now positioning the country as a regulated hub for digital asset innovation.
Pakistan has already taken steps to attract global crypto players. Officials signed a memorandum of understanding with Binance in December to explore tokenization initiatives potentially involving up to $2 billion in assets, and have granted initial regulatory clearances to both Binance and HTX.
In parallel, the country has explored blockchain-based financial infrastructure through discussions with an affiliate of World Liberty Financial, including the potential use of stablecoins for cross-border payments.
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