Pakistan has lifted an 8-year ban on banks dealing in cryptocurrencies, thereby allowing financial institutions to open and maintain accounts for licensed Virtual Asset Service Providers (VASPs).
On April 14, the State Bank of Pakistan (SBP), the central bank, issued a notice to banks, lifting the blanket prohibition on dealing in virtual currencies. As such, the ban, established under BPRD Circular No. 03 of 2018, was replaced by a structured, licensing-driven framework governing how banks may engage with the crypto sector.
The move follows the enactment of the Virtual Assets Act, 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA). The PVARA, which is chaired by Bilal Bin Saqib, is responsible for licensing and regulating virtual asset activities in the country.
Under the new regulations, SBP-regulated entities may open segregated, Pakistani Rupee (PKR)-denominated Client Money Accounts for PVARA-licensed VASPs. However, banks must monitor all VASP relationships on an ongoing basis and report suspicious transactions under Pakistan’s Anti-Money Laundering Act, 2010.
What is the impact of this regulatory move on Pakistan?
This regulatory shift will have a profound impact on roughly 40 million Pakistanis, representing 17% of the country’s population, who are already invested in the crypto industry. Furthermore, the country ranked 3rd behind India and the United States in global cryptocurrency adoption, according to a report from Chainalysis.
The new framework could also position Pakistan as an increasingly attractive destination for institutional crypto investors. Furthermore, Pakistan signaled its readiness to welcome institutional-grade crypto investors after it signed a memorandum of understanding with Binance, the world’s largest crypto exchange by trade volume, to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves.
