Pakistan’s central bank overturns the 2018 cryptocurrency ban, allowing banks to open accounts for licensed virtual asset service providers

Recently, the State Bank of Pakistan (Pakistan’s central bank) overturned the cryptocurrency ban issued in 2018 and officially allowed banks to open bank accounts for licensed virtual asset service providers (VASP).

This policy change is based on the Virtual Asset Act issued in 2026, marking Pakistan’s first time that crypto-related companies are included in the formal banking system.

Under the new rules, before banks accept a virtual asset service provider, they must verify the license held by the provider issued by the Pakistan Virtual Asset Regulatory Authority (PVARA), and open a separate “client funds account” denominated in Pakistani rupees for the customer.

The new rules implement strict account segregation standards, requiring such accounts to be completely separated from the service provider’s own accounts, with funds mixing strictly prohibited; at the same time, the accounts do not accrue interest, cash deposits and withdrawals are prohibited, and the balances may not be used as collateral for any form of loan or financing guarantee.

From the perspective of risk management and control, banks still need to fulfill anti-money laundering obligations such as customer due diligence, risk analysis, and suspicious transaction reporting, to ensure that the conduct of business fully complies with regulatory requirements.

In addition, banks must dynamically adjust customers’ risk profiling models in light of various risks in the virtual asset sector, and continuously monitor business relationships with virtual asset service providers; once suspicious transactions are identified, banks must promptly report them to the financial monitoring department.

It is worth noting that banks may provide account services to licensed virtual asset service providers, but they are strictly prohibited from using the provider’s own funds or customers’ deposits to conduct virtual asset investment, trading, and holding operations.

In addition, entities holding a No Objection Certificate (NOC) from PVARA may open limited-purpose accounts for license applications, but only after the entity officially obtains the license can the bank provide them with comprehensive services, including virtual-asset-related transactions.

#巴基斯坦 # Ban lifted