REGULATION | The Central Bank of Pakistan Allows Banks to Open Accounts for Licensed VASPs and their Customers

Pakistan’s central bank has allowed commercial banks to provide services to licensed cryptocurrency firms, effectively reversing a ban imposed in 2018 as the country moves to bring digital assets into the formal financial system.

Under new guidance issued, banks may open accounts for virtual asset service providers (VASPs) and their customers, provided the firms are licensed by the national regulator, the Pakistan Virtual Assets Regulatory Authority.

In a statement, the Pakistan Virtual Assets Regulatory Authority (PVARA) said:

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 for PVARA-licensed Virtual Asset Service Providers and their customers, subject to strict compliance and AML/CFT requirements.

This marks a transition from a previously restrictive environment to a structured, regulated framework.

The move follows the introduction of the Pakistan Virtual Assets Act 2026 and marks the first formal step toward integrating crypto-related businesses into the regulated banking sector under strict anti-money laundering and compliance requirements.

Banks must verify licences before onboarding clients and are required to maintain segregated, non-interest-bearing accounts in local currency, while remaining responsible for due diligence and reporting suspicious transactions, the central bank said.

Lenders are not permitted to invest in or hold virtual assets themselves, according to the new framework.

The policy shift comes as Pakistan accelerates efforts to formalize its crypto sector, including engaging global firms and exploring blockchain-based financial infrastructure such as tokenization and cross-border payments.

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