The State Bank of Pakistan has allowed banks to open accounts for licensed virtual asset service providers. The decision marks a major shift in Pakistan’s financial and regulatory landscape.
The move follows the enactment of the Virtual Assets Act, 2026. As a result, authorities aim to bring crypto-related businesses into the formal banking system.
“The Virtual Assets Act, 2026, has been enacted, pursuant to which the Pakistan Virtual Asset Regulatory Authority (PVARA) has been established as the statutory authority responsible for the licensing, regulation, supervision, and oversight of virtual asset activities in Pakistan.”
Previously, the central bank discouraged financial institutions from dealing with virtual currencies. However, the latest decision reverses earlier restrictions introduced in 2018.
Strict Verification and Compliance Requirements Introduced
Under the new framework, banks must verify PVARA licences before offering services. Therefore, financial institutions cannot onboard any provider without proper authentication.
“Subject to strict compliance with the conditions, SBP Regulated Entities (REs) may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs),”
“Prior to onboarding a VASP or initiating any activity with it, REs shall obtain and retain on record a copy of the VASP’s valid license issued by PVARA and independently verify its authenticity from PVARA,”
Moreover, banks must open separate accounts for client funds linked to virtual asset services. This requirement ensures transparency and prevents misuse of funds.
“REs shall open separate transactional accounts, ie, Client Money Accounts (CMAs), for settlement of authorised transactions of licensed VASPs, where applicable, based on the VASP’s business model to deliver permissible services to their clients,”
“Strict segregation between CMAs and other types of accounts of VASPs shall be ensured, and commingling of VASP funds with those of their clients shall be strictly prohibited.”
AML Rules Remain a Key Priority
Despite the policy shift, strict compliance standards remain in place. Banks must follow anti-money laundering and counter-terrorism financing regulations.
These measures include enhanced due diligence and continuous monitoring of transactions. In addition, institutions must report suspicious activities to relevant authorities.
Therefore, the new system combines access with strong regulatory oversight. This balance aims to reduce risks while supporting innovation.
Step Towards Formal Crypto Integration
The decision represents Pakistan’s first formal step toward integrating digital asset businesses into the regulated banking system. Consequently, the country joins a limited group of jurisdictions offering structured banking access to crypto firms.
Bilal bin Saqib, chairperson of PVARA, welcomed the move. He stated that the framework would help bring virtual assets into the formal economy.
Experts also believe the decision could attract new capital into Pakistan. Ibrahim Amin, a financial expert, highlighted the potential economic benefits.
He noted that regulated access to banking channels can encourage crypto investors. As a result, more funds may enter the local financial system.
Potential Impact on Investors and Economy
The new framework offers a clear pathway for crypto investors in Pakistan. They can now operate within a regulated and secure environment.
Moreover, digital asset platforms often provide attractive returns. Therefore, investors may increasingly explore these opportunities through formal channels.
Amin emphasized that this shift could support dollar inflows into local banks. Consequently, it may strengthen Pakistan’s financial stability.
He added that gradual regulatory progress will help build investor confidence. In the long term, this approach could benefit the broader economy.
A Controlled Yet Progressive Approach
The central bank’s decision reflects a cautious but forward-looking strategy. While it opens doors for innovation, it also enforces strict safeguards.
Authorities aim to balance financial growth with risk management. Therefore, compliance remains at the core of this framework.
Overall, the policy signals a significant change in Pakistan’s stance on digital assets. However, its success will depend on effective implementation and oversight.
