State Bank ends crypto ban in Pakistan in a major policy shift, as the central bank now allows financial institutions to provide banking services to licensed crypto companies under a newly established regulatory framework. This move marks a significant step toward integrating digital assets into Pakistan’s formal financial system.
The decision follows the implementation of the Virtual Assets Act 2026, which introduces a comprehensive legal structure for digital assets and establishes the Pakistan Virtual Assets Regulatory Authority (PVARA). This authority is responsible for licensing, regulating, and overseeing all virtual asset-related activities in the country.
Under the new guidelines, banks and financial institutions are now permitted to open accounts for companies registered as Virtual Asset Service Providers (VASPs). These include crypto exchanges, digital wallets, and blockchain-based platforms, provided they meet strict compliance and licensing requirements.
However, the policy comes with strict safeguards. Banks are prohibited from investing in, trading, or holding cryptocurrencies using their own or customers’ funds. Their role is limited to offering regulated banking infrastructure, ensuring transparency and reducing financial risks.
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Additionally, financial institutions must conduct enhanced due diligence, verify licenses, and monitor transactions to comply with anti-money laundering regulations. Client funds must be held in separate, non-interest-bearing accounts denominated in Pakistani rupees.
This move effectively reverses the long-standing restrictions imposed in 2018, when banks were barred from dealing with crypto-related businesses. The latest development signals Pakistan’s transition toward a regulated digital economy while maintaining strict oversight to prevent misuse.
The policy shift is expected to boost fintech innovation, attract global crypto players, and provide a safer environment for millions of Pakistani users already engaged in digital asset trading.
