Pakistan Lifts 8-Year Crypto Banking Ban

The State Bank of Pakistan has lifted an eight-year ban on banking services for cryptocurrency firms, authorizing banks to open accounts for licensed virtual asset service providers in a circular issued on April 14. This move, which follows the enactment of the Virtual Assets Act in March 2026, allows regulated financial institutions to onboard entities licensed by the newly established Pakistan Virtual Assets Regulatory Authority, or PVARA, marking a significant shift toward integrating digital assets into the country's formal financial system.

The decision reverses restrictions imposed in 2018 that prohibited banks from dealing with virtual currencies and tokens, a policy aimed at curbing risks like money laundering and volatility. Under the new guidelines, banks must verify the authenticity of PVARA licenses before providing services and maintain strict separation between a provider's operational funds and client assets. To facilitate this, institutions are required to create dedicated Client Money Accounts denominated in Pakistani rupees. These accounts operate on a noninterest-bearing basis, support only authorized transactions, and prohibit cash deposits, withdrawals, or...