Pakistan’s central bank overrides ban on accounts for crypto service providers

The State Bank of Pakistan has permitted banks to open accounts for licensed virtual asset service providers (VASPs), effectively rescinding a 2018 prohibition on banking involvement with virtual currencies. This revised framework requires banks to conduct enhanced due diligence and establish separate Client Money Accounts for VASP activities, ensuring client funds are segregated. Banks are prohibited from investing in virtual assets themselves but must comply with all regulatory requirements. This move follows the enactment of the Virtual Assets Act, 2026, and the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA), aiming to protect investors and foster regulated blockchain innovation. Previously, the 2018 restrictions drove crypto activity underground, leading to a surge in peer-to-peer transactions and an estimated 20 million users engaging with platforms like Binance.

(Source：Crypto Briefing)