Pakistan Allows Banks to Serve Licensed Crypto Firms

• Pakistan lifts 2018 crypto banking ban for PVARA-licensed virtual asset providers.
• Banks can open PKR-denominated client money accounts for licensed crypto firms.
• Cash deposits, withdrawals, and fund commingling are banned in new crypto accounts.

Pakistan has taken a step toward formalizing its digital asset ecosystem. The State Bank of Pakistan (SBP) issued BPRD Circular Letter No. 10 of 2026 on April 14, allowing regulated banks to open and maintain accounts for Virtual Asset Service Providers (VASPs) licensed by the Pakistan Virtual Asset Regulatory Authority (PVARA), and their customers.

The move follows the enactment of the Virtual Assets Act, 2026, under which PVARA was established as the statutory authority responsible for licensing, regulating, and supervising virtual asset activities across Pakistan.

What Has Changed

The circular replaces the earlier BPRD Circular No. 03 of 2018, which had effectively prohibited banks from dealing in virtual currencies and tokens. That restriction is now lifted, but only for entities holding a valid PVARA license.

Banks can now open dedicated Client Money Accounts (CMAs) for licensed VASPs to settle authorized transactions. These accounts come with strict conditions:

• CMAs must be PKR-denominated and non-remunerative
• Cash deposits and withdrawals are not permitted in CMAs
• Funds in CMAs cannot be used as collateral or to obtain credit facilities
• Commingling of VASP funds with client funds is strictly prohibited

Compliance Requirements

Regulated entities must verify the authenticity of a VASP’s license directly with PVARA before onboarding. They are also required to update their Customer Risk Profiling models to account for risks specific to virtual asset businesses, monitor relationships with VASPs on an ongoing basis, and report any suspicious transactions to the Financial Monitoring Unit under the Anti-Money Laundering Act, 2010.

Banks are explicitly barred from investing in or holding virtual assets using their own funds or customer deposits.

Why This Matters

Until now, Pakistan’s crypto sector operated in a regulatory grey zone, with banks largely unwilling to serve digital asset businesses due to the 2018 prohibition. The new framework changes that, not by removing oversight, but by creating a structured pathway for compliant businesses to access the formal financial system.

This marks a transition from restriction to regulation, a shift that brings Pakistan in line with jurisdictions that have moved toward structured digital asset frameworks rather than outright bans.

Related: Pakistan Passes Virtual Assets Act 2026 to Catalyze Crypto Adoption