State Bank of Pakistan Lifts 2018 Crypto Banking Ban, Allows Accounts for Licensed Virtual Asset Providers

Islamabad, — The State Bank of Pakistan (SBP) has formally allowed commercial banks to open and maintain bank accounts for licensed Virtual Asset Service Providers (VASPs) and their customers, marking a significant policy shift toward regulated digital finance.
In BPRD Circular Letter No. 10 of 2026 issued on April 14, the central bank withdrew its 2018 circular (BPRD Circular No. 03 of 2018) that had prohibited all dealings in virtual currencies and tokens. Banks can now provide services only to entities duly licensed by the newly established Pakistan Virtual Assets Regulatory Authority (PVARA) under the Virtual Assets Act, 2026.
Key conditions include:
Accounts must be opened as segregated Client Money Accounts (CMAs) in Pakistani Rupees only.
These accounts will be non-interest bearing with strict segregation of client funds from VASP’s own funds.
No cash deposits or withdrawals will be allowed in certain cases.
Banks remain fully responsible for customer due diligence, risk assessment, and suspicious transaction reporting.
Banks themselves are barred from investing in, holding, or trading virtual assets using their own or customers’ funds.
Officials described the move as a step to align Pakistan’s financial system with modern digital economy needs while maintaining strong anti-money laundering (AML) and compliance standards.
The development is expected to unlock new investment opportunities, innovation, and formalization in Pakistan’s digital finance sector, which has seen growing interest from both local and international players.