Pakistan has allowed banks to service licensed crypto firms under a new legal framework, ending a years-long restriction.
Banks remain barred from trading or holding crypto, with strict AML, KYC, and fund segregation rules in place.
News - Pakistan has formally reopened its banking system to the crypto sector, reversing a restriction first introduced in 2018. Under new rules issued by the State Bank of Pakistan (SBP), banks and regulated entities can now provide services to virtual asset service providers (VASPs) licensed by the Pakistan Virtual Asset Regulatory Authority (PVARA).
The shift follows the Virtual Assets Act 2026, which establishes a structured framework for licensing, regulation, and oversight of digital asset activity. While banks may open accounts for approved firms, their role is limited to facilitation, with no ability to trade, invest in, or hold crypto assets.
Guardrails define the new framework - The updated rules introduce strict compliance requirements, including enhanced due diligence, ongoing transaction monitoring, and adherence to anti-money laundering and counter-terror financing standards.
Banks must maintain separate, rupee-denominated Client Money Accounts, ensuring customer funds remain segregated and cannot be used for lending, collateral, or operational purposes.
A shift driven by real-world adoption - The policy change reflects a market that continued to grow despite restrictions. Millions of users relied on peer-to-peer platforms and offshore exchanges, pushing activity outside the formal system.
In 2025 alone, Pakistan processed about $25 billion in crypto transactions, highlighting the scale of adoption. The new framework now brings that activity into a regulated environment while supporting future plans around tokenized assets, mining, and potential stablecoin development.