Pakistan Opens Banking System to Regulated Crypto Firms
State Bank of Pakistan has allowed banks to provide services to licensed crypto firms, reversing a long-standing restriction and marking a shift in how the country approaches digital assets.
Summary:
- Pakistan lifts its 2018 crypto banking ban for licensed firms.
- Banks can now onboard regulated crypto companies under strict rules.
- The move aligns with global standards and signals a broader policy shift.
The decision, formalized through a circular issued on April 14, replaces the central bank’s earlier prohibition on dealing with virtual assets. Banks, microfinance institutions and payment operators can now open accounts for firms licensed by the Pakistan Virtual Assets Regulatory Authority, or those granted a no-objection certificate.
From Ban to Controlled Access
Pakistan had effectively blocked banking access for crypto businesses since 2018, limiting the sector’s ability to operate within the formal financial system. The new framework lifts that restriction, but only for firms that meet regulatory requirements.
Under the updated rules, crypto companies must be licensed under the country’s new legal regime introduced through the Virtual Assets Act 2026. The law established a dedicated regulator and introduced penalties for unauthorized operations, including fines and potential prison terms.
The shift brings Pakistan closer to jurisdictions that are attempting to regulate – rather than restrict – digital asset activity.
Tight Guardrails for Banks
Despite the policy change, the central bank has imposed strict conditions on how banks can engage with the sector.
Financial institutions are not allowed to hold, trade or invest in cryptocurrencies themselves. Their role is limited to providing basic banking services to approved firms.
Crypto companies must also maintain segregated accounts for client funds. These accounts are required to be separated from operational balances, ensuring that customer money is not used for business expenses.
In addition, the accounts must operate digitally, with no cash deposits or withdrawals allowed. The central bank also specified that these balances will not earn interest, reflecting both regulatory and religious considerations.
Building a Regulated Crypto Framework
The policy change follows the introduction of the Virtual Assets Act earlier in March, which created the Pakistan Virtual Assets Regulatory Authority as the primary oversight body.
The regulator is tasked with licensing and supervising crypto firms, as well as enforcing compliance standards tied to anti-money laundering and counter-terrorism financing.
Authorities have indicated that major international exchanges, including Binance, are already engaging with the framework and seeking approvals to operate locally.
The presence of global players could accelerate adoption, while also testing how effectively the new system handles cross-border platforms.
Economic and Strategic Considerations
The move is part of a broader economic strategy. Policymakers are exploring the role of digital assets in financial inclusion, cross-border payments and infrastructure development.
There have also been discussions around allocating surplus electricity for crypto mining and artificial intelligence data centers, reflecting an effort to monetize excess capacity.
At the same time, officials are studying the use of stablecoins for international settlements, which could provide a faster and more cost-effective alternative to traditional remittance channels.
Aligning With Global Standards
Pakistan’s shift is also tied to international compliance pressures. Aligning with standards set by global bodies such as the Financial Action Task Force has been a key priority, particularly around monitoring financial flows and reducing illicit activity.
By bringing crypto firms into the regulated banking system, authorities gain greater visibility and control over transactions, while allowing the industry to operate within defined boundaries.
The result is a more structured approach to digital assets – one that opens the door to growth while attempting to limit systemic risk.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
