Pakistan’s central bank has authorized commercial banks to open accounts for licensed virtual asset service providers, ending a prohibition that had been in place since 2018. The supporting evidence appears in the cited X post.
The State Bank of Pakistan issued a formal circular on April 14, marking the country’s clearest regulatory endorsement of the crypto sector to date.
The directive permits regulated financial institutions to provide banking services to entities licensed by the Pakistan Virtual Assets Regulatory Authority, known as PVARA, the statutory body responsible for licensing and oversight of virtual asset businesses in the country. The move follows parliament’s passage of the Virtual Assets Act 2026 in March and the SBP’s official circular sets out a detailed compliance framework that both banks and licensed firms must follow.
What the SBP Circular Actually Requires
The circular is precise about the boundaries of this new relationship. Banks are expressly prohibited from investing, trading, or holding virtual assets using their own funds or customer deposits.
Their role is confined strictly to providing banking infrastructure to licensed firms, not to taking any direct exposure to digital assets themselves.
A key structural requirement is the creation of Client Money Accounts, or CMAs, which must be denominated in Pakistani rupees and kept entirely separate from other VASP accounts. Commingling of VASP funds with client assets is explicitly prohibited.
This segregation framework mirrors the kind of client asset protection rules that crypto regulators in the European Union and the United Kingdom have pushed for under their own digital asset regimes.
Banks taking on crypto firm clients must also go beyond their standard anti-money laundering and counter-financing of terrorism procedures.
The SBP circular requires regulated entities to conduct full due diligence on each virtual asset service provider, update their customer risk profiling models to capture VASP-specific risks, and assign risk ratings to each licensed firm accordingly.
Any suspicious transactions must be reported to Pakistan’s Financial Monitoring Unit, ensuring that the central bank retains visibility over the sector.
The SBP was also explicit that no banking arrangement with a VASP removes existing obligations. Banks remain responsible for full compliance with all central bank regulations, including foreign exchange rules, regardless of which licensed crypto firm they choose to serve.
Pakistan's Broader Crypto Ambitions Come Into View
The banking circular does not exist in isolation. Pakistani authorities have been quietly accelerating their engagement with the global crypto industry over the past several months.
In December 2025, officials held discussions with major exchanges including Binance and HTX as part of a broader effort to attract regulated trading platforms to the country.
Pakistan has also explored blockchain-based financial infrastructure through engagements with affiliates of World Liberty Financial, including conversations around the use of stablecoins for cross-border payments.
That thread of engagement signals that policymakers are looking beyond basic crypto trading toward potential use cases in remittances and international settlements, both areas of significant economic interest for a country with one of the world’s largest overseas worker populations.
The Virtual Assets Act 2026, passed in March, provided the legislative foundation that made the SBP circular possible.
PVARA was established under that legislation as the dedicated licensing and oversight body, giving Pakistan a structural framework comparable to those now operating in the UAE, Singapore, and parts of the European Union.
The creation of a purpose-built regulator rather than simply assigning oversight to an existing financial watchdog suggests a long-term institutional commitment to the sector.
Binance co-founder Changpeng Zhao previously remarked publicly that Pakistan could emerge as a significant crypto player within five years if its reform momentum continued at its current pace.
The April 14 circular gives that trajectory a concrete regulatory anchor, converting years of informal engagement and cautious signaling into binding policy that commercial banks must now implement.
For the wider region, Pakistan’s move adds to a pattern of emerging market governments formalizing crypto oversight rather than sustaining outright bans.
The question for the industry now is how quickly PVARA will process licensing applications and whether Pakistan’s compliance framework will prove strict enough to satisfy international financial integrity standards, particularly those set by the Financial Action Task Force.
Not Financial Advice: This article is for informational purposes only. Crypto investments are highly volatile. Always do your own research.
