Pakistan Opens Banking System to Licensed Crypto Firms After 2018 Ban

Pakistan’s central bank has opened the formal banking system to licensed virtual asset service providers, marking a major shift in the country’s approach to crypto oversight. The move allows banks to open accounts for firms licensed by the Pakistan Virtual Assets Regulatory Authority, or PVARA, after years of keeping crypto businesses outside the regulated financial sector.

The decision follows Pakistan’s new Virtual Assets Act 2026, which created a legal framework for licensing and supervising crypto-related businesses. Under the new rules, banks can provide services to licensed firms, but only after verifying their regulatory status and meeting anti-money-laundering and compliance requirements.

The change reverses a 2018 restriction that had effectively blocked banks from working with crypto-linked entities. It is the first formal step by Pakistan to bring virtual asset firms into the banking system instead of leaving them to operate outside traditional finance.

New Rules Allow Access but Keep Tight Limits

The new policy does not give banks freedom to trade or hold crypto. Reuters reported that banks remain barred from investing in virtual assets themselves or doing so on behalf of clients. In addition, customer funds tied to these firms must be kept in segregated, non-interest-bearing local currency accounts.

Banks must also continue monitoring transactions, carrying out due diligence, and reporting suspicious activity under existing financial crime rules. The framework ties access to the banking system to licensing and ongoing compliance, which means only approved firms can benefit from the new opening.

That structure suggests Pakistan is not easing oversight. Instead, it is shifting from exclusion to controlled access. The government has recently moved to build out a broader crypto framework, including licensing activity under PVARA and wider engagement with major international crypto companies.

Pakistan Ties Crypto Access to Formal Regulation

The banking change could help licensed crypto firms handle payments, payroll, and client funds through regulated channels that were previously unavailable. That may reduce one of the biggest operating hurdles for the sector in Pakistan, where firms had long faced difficulty accessing basic financial services.

At the same time, the central bank’s restrictions show that Pakistan is drawing a line between regulated banking access and direct bank exposure to crypto assets. The policy keeps traditional lenders inside a narrow role while the new regulator handles licensing and sector oversight.

For now, the message from Islamabad is clear: crypto businesses can enter the banking system, but only through licensing, supervision, and strict compliance controls