Pakistan lifts crypto banking ban, opens accounts to licensed exchanges

Pakistan's central bank, the State Bank of Pakistan, has ended its seven-year prohibition on serving cryptocurrency businesses, issuing a circular permitting financial institutions to open accounts for virtual asset firms holding active authorisation from the newly established Pakistan Virtual Assets Regulatory Authority, CMC reported.

The move operationalises the Virtual Assets Act 2026, which established Pakistan's legal framework for digital currencies when passed in March 2026. Government officials had previously held discussions with major exchanges, including Binance and HTX, in December 2025, while also evaluating stablecoins for potential use in international settlements.

Under the new rules, banks are restricted to providing account services only, with explicit prohibitions against purchasing, selling or holding digital tokens using bank reserves or client deposits.

Accounts for crypto businesses must be denominated in Pakistani rupees, designated as Client Money Accounts, and maintained separately from firms' operational capital.

Financial institutions serving virtual asset providers are required to conduct initial background checks, update risk assessment models, maintain continuous transaction monitoring, and report suspicious transfers to Pakistan's Financial Monitoring Unit, reflecting a cautious regulatory approach that balances market access with anti-money laundering safeguards.

The policy shift positions Pakistan among a growing number of jurisdictions establishing formal banking pathways for licensed crypto firms, potentially easing operational constraints for exchanges seeking to serve Pakistani customers while maintaining strict oversight over the sector's interaction with the traditional banking system.