Pakistan Lifts an Eight-Year Ban: Central Bank Allows Banks to Serve Crypto Businesses, and the Virtual Assets Law Takes Effect

According to ProPakistani reports, the State Bank of Pakistan (SBP) issued BPRD Circular Letter No. 10 of 2026 on April 14, officially lifting the eight-year cryptocurrency banking ban that has been in place since 2018. This allows banks to provide account services to licensed virtual asset service providers (VASPs).

End of the eight-year ban: The Virtual Assets Act 2026 officially takes effect

Pakistan has banned banks from conducting business with cryptocurrency-related companies nationwide since 2018, leaving the country’s crypto market in a long-running gray area. Now, with the official implementation of the Virtual Assets Act 2026, the Pakistan Virtual Asset Regulatory Authority (PVARA) has been formally established as a statutory authorized body. It is responsible for reviewing and issuing VASP operating licenses.

Under the new rules, banks may open and maintain bank accounts for virtual asset service providers that obtain a valid PVARA no-objection certificate (NOC) or a formal license. This policy shift means that compliant crypto exchanges, custodial services, and other VASP operators will for the first time gain access to official banking channels.

Strict fund segregation requirements

It is worth noting that, while the new rules open up access, they also set clear red lines. The SBP requires banks to establish separate “client money accounts” (Client Money Accounts, CMAs) for VASP client funds to ensure that clients’ assets and the operator’s own funds are completely segregated.

In addition, banks themselves may not invest, trade, or hold any virtual assets using their own funds or client deposits. This prohibition ensures that the traditional banking system will not be directly exposed to the volatility risks of crypto assets, and that it only plays the role of a funds conduit.

Item Content Circular letter number BPRD Circular Letter No. 10 of 2026 Effective date April 14, 2026 Regulatory authority Pakistan Virtual Asset Regulatory Authority (PVARA) Banks can do Open accounts and set up client money accounts (CMAs) for licensed VASPs Banks cannot do Invest, trade, or hold virtual assets with their own funds or client deposits

Geopolitical context: Pakistan’s role grows increasingly important

The timing of this policy shift is worth paying attention to. Pakistan has been playing a more important role on the international stage recently— the country just hosted the U.S.-Iran ceasefire talks in Islamabad. Although the first round did not reach an agreement, Pakistan’s position as an intermediary has gained international recognition.

Analysts believe that Pakistan is pushing to normalize cryptocurrency regulation at this time for two reasons: on the one hand, it responds to the country’s large domestic demand for crypto usage (estimates suggest Pakistan has more than 20 million crypto users); on the other hand, it demonstrates the country’s resolve to carry out economic reforms and align with international standards. As global VASP regulatory frameworks gradually take shape, Pakistan’s move is expected to attract more international crypto companies to enter the market.

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