ISLAMABAD: The State Bank of Pakistan has formally legalised and encouraged the use of virtual assets by implementing the Virtual Assets Act 2026, marking a significant shift in the country’s digital finance landscape.
Under the new framework, authorities have established the Pakistan Virtual Asset Regulatory Authority as the primary body responsible for licensing, regulating, and supervising all virtual asset-related activities. Consequently, the move creates Pakistan’s first comprehensive legal structure for cryptocurrency and digital asset businesses.
The central bank stated that regulated entities, including banks and financial institutions, can now open accounts for companies licensed as Virtual Asset Service Providers. This development allows crypto exchanges, digital wallets and fintech platforms to access the formal banking system, provided they meet strict licensing and compliance requirements.
Moreover, banks have been directed to verify each provider’s licence before onboarding and to maintain separate client accounts for transactions. These accounts will be rupee-denominated and non-interest-bearing, while cash deposits and withdrawals will not be permitted.
At the same time, authorities have imposed stringent anti-money laundering measures. Financial institutions must conduct enhanced due diligence, monitor customer activity and report suspicious transactions in line with national regulations.
However, the framework places clear restrictions on banks. They are not allowed to invest in, trade or hold virtual assets using their own funds or customer deposits. As a result, the legalisation focuses on regulated access and infrastructure rather than speculative activity within the banking sector.
Previously, Pakistan maintained a restrictive stance on cryptocurrencies, with limited banking support for related businesses. Therefore, the introduction of this law signals a major policy shift toward regulated adoption of blockchain-based services.
Overall, officials believe the new system balances innovation with risk management, enabling growth in the digital economy while maintaining strong oversight and financial safeguards.
