Pakistan’s central bank has authorized regulated banks to open accounts for licensed virtual asset service providers (VASPs) and their customers, effectively ending an eight-year prohibition on dealing with virtual currencies. In a circular dated April 14, the State Bank of Pakistan (SBP) said banks may provide banking services to entities licensed and supervised by the Pakistan Virtual Assets Regulatory Authority (PVARA).
The authorization follows the March passage of the Virtual Assets Act 2026 and signals a move toward a formal regulatory framework for digital assets after the 2018 ban. Pakistani authorities have also engaged with major international exchanges, including Binance and HTX in December 2025, as part of efforts to attract regulated trading platforms. Separately, Pakistan has been exploring blockchain-based financial infrastructure and has held discussions with affiliates of World Liberty Financial about using stablecoins for cross-border payments.
Strict limits on banks’ roles
The SBP’s guidance allows banks to provide standard banking services to licensed VASPs but imposes clear prohibitions and compliance obligations. Banks are not permitted to invest in, trade, or hold virtual assets using their own funds or customer deposits. The circular emphasizes that banks’ relationships with VASPs do not exempt them from existing central bank obligations, including foreign exchange rules.
Operational and compliance requirements
Banks must open separate Pakistan-rupee transactional accounts—designated Client Money Accounts (CMAs)—for settlement of authorized transactions by licensed VASPs. CMAs must be strictly segregated from other VASP accounts, and commingling of client funds with other assets is forbidden.
In addition to existing customer due diligence under SBP anti-money laundering (AML) and countering the financing of terrorism (CFT) rules, banks must perform full due diligence on each VASP. Institutions are required to update customer risk-profiling models to capture VASP-related risks, assign risk ratings to VASPs, continuously monitor VASP relationships, and report any suspicious transactions to Pakistan’s Financial Monitoring Unit.
The SBP’s directive aims to enable regulated banking access for licensed crypto firms while maintaining tight controls to manage financial integrity, foreign-exchange compliance, and AML/CFT risks as Pakistan builds out its virtual-asset regime.