Pakistan Allows Banks to Onboard Crypto Firms

The State Bank of Pakistan has authorised banking institutions to open accounts for licensed virtual asset service providers (VASPs), effectively superseding the regulatory restrictions imposed in 2018. This development, formalised through a central bank circular and supported by the virtual asset regulatory authority, represents a significant policy shift toward integrating digital assets within Pakistan’s regulated financial framework.

The regulatory change follows the enactment of the Virtual Assets Act, 2026 and constitutes the country’s first formal step toward incorporating crypto-related businesses into the formal banking system, subject to stringent anti-money laundering (AML) and compliance requirements.

According to Bilal bin Saqib, Chairman of the Pakistan Virtual Assets Regulatory Authority, the measure represents a foundational milestone in the formalisation of virtual asset activities within Pakistan’s financial ecosystem.

Under the revised framework, banks are required to verify licences issued by the regulatory authority prior to onboarding VASPs and must maintain segregated, non-interest-bearing client accounts denominated in Pakistani rupees. The central bank has further clarified that financial institutions will retain full responsibility for conducting due diligence, risk assessments, and reporting suspicious transactions in accordance with applicable regulatory standards.

Additionally, banks are expressly prohibited from investing in or holding virtual assets using either their own capital or customer funds, thereby limiting exposure to associated risks.

Pakistan has concurrently taken steps to engage with international digital asset platforms. Notably, the government has executed a memorandum of understanding with Binance to explore the tokenisation of assets valued at up to $2 billion and has granted preliminary clearances to both Binance and HTX to commence the licensing process.

Furthermore, Pakistan has entered into an arrangement with an affiliate of World Liberty Financial to examine the potential deployment of stablecoin-based solutions for cross-border payment systems.