Pakistan Lifts Eight-Year Ban on Banking for Crypto Firms
The State Bank of Pakistan has reversed its 2018 ban on crypto-related banking, allowing regulated institutions to open accounts for licensed virtual asset providers. Banks still cannot trade or hold crypto themselves.
Quick Insights
- Pakistan's State Bank has reversed its 2018 blanket ban on crypto-related banking, allowing regulated institutions to serve licensed virtual asset firms.
- Banks can open accounts for providers approved by the new Pakistan Virtual Asset Regulatory Authority but remain barred from trading, investing in or holding crypto with their own funds.
- Around 40 million Pakistanis, roughly 17% of the population, already trade crypto, making the country the third-largest retail market ahead of Germany and Japan.
Pakistan's central bank has formally ended the ban that kept crypto businesses locked out of the country's banking system for eight years. The State Bank of Pakistan issued BPRD Circular Letter No. 10 of 2026 on April 14, allowing regulated banks and financial institutions to open and maintain accounts for licensed virtual asset service providers. The new rules replace a 2018 directive that blocked all crypto-related banking activity.
The circular takes effect immediately. It follows Parliament's passage of the Virtual Assets Act 2026 in March, which converted the Pakistan Virtual Asset Regulatory Authority from a temporary presidential body into a permanent statutory regulator with the power to license, supervise and enforce compliance across the sector.
Banks Can Serve Crypto Firms but Cannot Touch Crypto Themselves
The new framework draws a clear line. Banks may open accounts for virtual asset service providers that hold a valid licence or no-objection certificate from PVARA. They can also serve firms that are in the process of applying for approval. But no bank is allowed to trade, invest in or hold crypto assets using its own capital or customer deposits.
"SBP Regulated Entities may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers."
The rules also require banks to open dedicated client money accounts for VASP customers, keeping company funds and customer funds separated. Every onboarding must include licence verification, a review of the firm's business model, and updated risk profiling. Banks must report suspicious transactions to the Financial Monitoring Unit under Pakistan's Anti-Money Laundering Act.
Eight Years of Restrictions Pushed Crypto Underground
The original ban came in April 2018, when the State Bank told all financial institutions to stop processing virtual currency transactions. Rather than killing demand, it pushed activity underground. Peer-to-peer trading surged by over 700% in the years that followed, according to the Federation of Pakistan Chambers of Commerce and Industry.
By the government's own estimate, around 40 million Pakistanis now trade crypto. That makes the country the third-largest retail market globally, behind India and Nigeria and ahead of Germany and Japan. Binance alone built a user base of over 20 million in Pakistan despite the banking freeze.
Bringing that activity into a regulated framework is the stated goal of the new legislation. The Virtual Assets Act is designed to protect investors and preserve market integrity while creating space for licensed innovation through sandboxes and dedicated virtual asset zones.
Binance MOU and National Stablecoin Signal Broader Ambitions
The banking circular is part of a wider push. In December 2025, Pakistan's Finance Ministry and Binance signed a memorandum of understanding to explore the tokenisation of up to $2 billion in sovereign bonds, treasury bills and commodity reserves. The deal is non-binding and needs definitive agreements within six months, but it signals where the government is heading.
PVARA also granted preliminary clearances to Binance and HTX to begin local licensing. Both firms can now establish domestic subsidiaries and work toward full exchange licences. CZ, Binance's founder and a strategic adviser to the Pakistan Crypto Council, called the agreement a positive signal for the industry.
That same month, PVARA chairman Bilal Bin Saqib outlined plans for a national stablecoin, expanded Bitcoin mining using 2,000 megawatts of allocated power, and a broader strategy to make Pakistan a hub for regulated digital asset activity in South Asia.
- Licensed crypto firms can now open formal bank accounts in Pakistan for the first time, ending eight years of exclusion from the banking system.
- Banks must verify every VASP's licence, conduct enhanced due diligence, maintain ongoing transaction monitoring and report suspicious activity.
- Customer funds held by crypto providers must sit in segregated, non-interest-bearing rupee accounts, separate from the firm's own capital.
- Banks themselves cannot buy, sell or hold any virtual assets, keeping the traditional banking system at arm's length from direct crypto exposure.
For a country where one in six people already trades crypto, the impact could be large. Millions of users who relied on informal channels now have a path toward licensed platforms inside the banking system. Whether enough providers can clear PVARA's requirements fast enough to meet that demand is the next question. The legal framework is in place. The infrastructure to support it is still catching up.
