KARACHI: In a major policy shift, the State Bank of Pakistan (SBP) has formally lifted its 2018 prohibition on cryptocurrency-related banking, authorizing financial institutions to open accounts for licensed Virtual Asset Service Providers (VASPs). The decision, announced on Wednesday via BPRD Circular Letter No. 10 of 2026, follows the enactment of the Virtual Assets Act 2026 and the establishment of the Pakistan Virtual Assets Regulatory Authority (PVARA). This move is designed to bring digital assets into the country’s formal financial system while ensuring rigorous compliance with international anti-money laundering (AML) and counter-terrorism financing (CFT) standards.
Bilal bin Saqib, Chairman of PVARA, hailed the development as a “foundational step” for Pakistan’s digital economy. Under the new framework, banks are permitted to open separate, non-interest-bearing “Client Money Accounts” (CMAs) in PKR for VASPs, provided they independently verify the authenticity of the firm’s PVARA-issued license. The central bank emphasized that these accounts must remain strictly segregated from the firms’ own operational funds to protect customer deposits. While banks can now facilitate transactions for crypto exchanges and custodians, they remain prohibited from trading, holding, or investing in virtual assets using their own capital or customer deposits.
This regulatory milestone coincides with Pakistan’s increasing engagement with global digital finance leaders. The government previously signed a memorandum of understanding with Binance to explore a $2 billion asset tokenization initiative and has granted preliminary clearances to major exchanges like Binance and HTX. Furthermore, a January agreement with an affiliate of World Liberty Financial aims to explore stablecoin-integrated cross-border payment systems. By shifting from a restrictive stance to a structured, regulated environment, Pakistan aims to position itself as a transparent hub for blockchain innovation while maintaining strict oversight of its evolving financial landscape.
