- Pakistan ends 8-year crypto banking ban, enabling licensed firms to access financial services under strict regulations.
- Banks must separate client funds, enforce compliance, and avoid direct crypto exposure or trading activities.
- New framework signals shift toward regulated crypto adoption with oversight, partnerships, and tokenization initiatives.
Pakistan has reversed its 2018 crypto banking ban this week, allowing banks to serve licensed firms under new rules. The State Bank of Pakistan issued the directive on April 14, 2026, aligning with the recently passed Virtual Assets Act. The move permits regulated access while enforcing strict compliance, segregation, and monitoring requirements.
Banking Access Returns Under Strict Oversight
The State Bank of Pakistan confirmed banks can now open accounts for licensed Virtual Asset Service Providers. However, institutions must verify each firm’s regulatory status before onboarding.
Notably, banks must keep client funds in separate rupee-denominated accounts. These accounts, called Client Money Accounts, cannot mix with other operational funds. However, banks cannot trade or hold crypto assets themselves.
They also cannot use customer deposits for any crypto-related exposure. As a result, their role remains limited to financial services and compliance enforcement. Authorities emphasized that existing foreign exchange and regulatory rules still apply fully.
Compliance Rules Tighten for Crypto Clients
With access restored, regulators placed strong emphasis on due diligence and monitoring. Banks must assess risks tied to each licensed crypto firm. They must also update internal risk models to reflect exposure linked to digital asset businesses.
Additionally, ongoing monitoring is required throughout the banking relationship. If suspicious activity appears, banks must report it to Pakistan’s Financial Monitoring Unit. This ensures alignment with anti-money laundering and counter-terror financing rules.
Meanwhile, regulators stressed that onboarding crypto firms does not reduce banks’ compliance responsibilities. Each institution remains fully accountable for oversight.
Policy Shift Follows Broader Crypto Framework
The change follows Pakistan’s Virtual Assets Act passed in March 2026. That law established the Pakistan Virtual Assets Regulatory Authority to oversee the sector.
Earlier discussions with firms such as Binance and HTX signaled growing engagement with global crypto platforms. Authorities also explored blockchain infrastructure tied to cross-border payments.
Pakistan signed agreements involving World Liberty Financial, including work on a dollar-pegged stablecoin. Another deal with Binance may support tokenization of up to $2 billion in assets.
These steps show a structured shift from restriction to regulated participation within Pakistan’s financial system.
