- Banks may open accounts after PVARA verification.
- Separate client money accounts made mandatory.
- AML and compliance rules remain strict.
The State Bank of Pakistan has allowed financial institutions to open accounts for licensed virtual asset service providers, The News reported, a move analysts say could draw crypto investors into formal banking channels and support capital inflows.
The development follows the enactment of the Virtual Assets Act, 2026, and reflects Pakistan’s push to bring crypto-related businesses into the banking system under strict anti-money laundering and compliance rules.
In a circular, the SBP said: “The Virtual Assets Act, 2026, has been enacted, pursuant to which the Pakistan Virtual Asset Regulatory Authority (PVARA) has been established as the statutory authority responsible for the licensing, regulation, supervision, and oversight of virtual asset activities in Pakistan.”
According to the SBP, it has revoked its previous instructions issued in 2018, which stated that virtual currencies, coins, and tokens were not considered legal tender and urged financial institutions to avoid activities such as processing, using, trading, holding, transferring value, promoting, and investing in them.
Under the new rules, banks must independently verify PVARA licences before providing services. Institutions are required to open separate Pakistani rupee-denominated client money accounts for VASP-related transactions, with strict prohibitions on commingling of funds or using such accounts as collateral. Entities operating under a PVARA no-objection certificate may access limited banking services, while full services are reserved for licensed providers.
Banks will remain subject to existing anti-money laundering and counter-terrorism financing obligations, including enhanced due diligence, risk profiling and reporting of suspicious transactions to the Financial Monitoring Unit.
The central bank’s decision marks the first formal integration of licensed virtual asset businesses into Pakistan’s regulated banking system, aligning the country with a small group of jurisdictions that have established structured banking access for digital asset providers.
Bilal bin Saqib, chairperson of PVARA, said the framework would help bring virtual assets into the formal financial system by enabling regulated access to banking channels and strengthening compliance standards.
“Subject to strict compliance with the conditions, SBP Regulated Entities (REs) may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs),” the SBP said in the latest circular.
“Prior to onboarding a VASP or initiating any activity with it, REs shall obtain and retain on record a copy of the VASP’s valid license issued by PVARA and independently verify its authenticity from PVARA,” it added.
“REs shall open separate transactional accounts, ie, Client Money Accounts (CMAs), for settlement of authorised transactions of licensed VASPs, where applicable, based on the VASP’s business model to deliver permissible services to their clients,” it added. “Strict segregation between CMAs and other types of accounts of VASPs shall be ensured, and commingling of VASP funds with those of their clients shall be strictly prohibited.”
Ibrahim Amin, a financial expert, said that the decision to allow banks to facilitate crypto investors in opening and maintaining accounts is a good step, seemingly to attract capital inflows into the country’s banking system.
He noted that the gradual progress to attract crypto investors into mainstream banking channels, along with regulatory checks and monitoring and calculated steps to invite crypto exchange companies to establish their system in Pakistan, will ultimately benefit the economy of the country.
The cryptocurrency platforms are providing handsome returns to investors; hence, many investors and customers in Pakistan will have a banking corridor to park their savings and investments in digital currencies, and the inflows of dollars will remain in the local banks, Amin said.
