Pakistan Banks Can Now Serve Crypto Firms After 8-Year Ban Ends

Pakistan’s central bank has officially permitted financial institutions to open accounts for licensed cryptocurrency firms, ending an eight-year prohibition that forced the country’s estimated $20-25 billion crypto market underground.

The State Bank of Pakistan circular, dated April 14, authorizes banks to service entities licensed by the Pakistan Virtual Assets Regulatory Authority (PVARA). But don’t expect Pakistani banks to start trading Bitcoin anytime soon—the framework explicitly prohibits them from investing, trading, or holding virtual assets using their own funds or customer deposits.

Strict Guardrails on Banking Relationships

The new rules require banks to establish separate Client Money Accounts (CMAs) denominated in Pakistani rupees for settlement of VASP transactions. These accounts must remain strictly segregated from other VASP operational funds, with zero tolerance for commingling client assets.

Banks accepting crypto firm clients face enhanced compliance burdens. Beyond standard anti-money laundering requirements, they must conduct full due diligence on each VASP, update their customer risk profiling models to capture crypto-specific risks, and maintain ongoing monitoring of these relationships. Any suspicious activity goes straight to Pakistan’s Financial Monitoring Unit.

From Outright Ban to Regulated Framework

The policy reversal caps a remarkable shift in Pakistan’s crypto stance. When the SBP issued its 2018 advisory warning financial institutions against processing cryptocurrency transactions, officials cited fraud, money laundering, and volatility concerns. That ban pushed crypto activity into informal channels while adoption quietly exploded.

Despite the prohibition, Pakistan ranked among the world’s top crypto-adopting nations, driven largely by inflation and rupee devaluation pushing citizens toward alternative stores of value. The disconnect between policy and reality eventually became impossible to ignore.

The groundwork for today’s announcement began with the Pakistan Virtual Assets Ordinance in July 2025, which established PVARA. Parliament formalized the framework by passing the Virtual Assets Act 2026 in March.

Major Exchanges Already in Talks

Authorities haven’t been waiting for the rules to take effect before courting industry players. Discussions with Binance and HTX reportedly occurred in December 2025 as part of efforts to attract regulated trading platforms. Separately, Pakistan has explored blockchain-based financial infrastructure through engagements with World Liberty Financial affiliates, including potential stablecoin use for cross-border payments.

For the Pakistani crypto community, bank account access removes a major operational headache. Licensed exchanges can now settle transactions through formal banking channels rather than relying on workarounds. The real test comes next: whether PVARA’s licensing process moves quickly enough to bring existing operators into compliance before enforcement begins.

Image source: Shutterstock