Pakistan’s Central Bank Lifts Ban on Crypto Operations for Banks

Pakistan's central bank allows banks to work with crypto firms.

The State Bank of Pakistan has lifted an eight-year ban on cryptocurrency operations. Local financial institutions are now permitted to open accounts for virtual asset service providers (VASP) registered in the country and their clients. 

Pakistan has taken an important step toward formalising its virtual asset ecosystem.

Following the enactment of the Virtual Assets Act, 2026, the State Bank of Pakistan has issued BPRD Circular Letter No. 10 of 2026, enabling regulated entities to open and maintain bank accounts… pic.twitter.com/cuUhwSiCfS

— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) April 14, 2026

The role of banks is limited to providing relevant services, as emphasized by the central bank. They are still prohibited from investing in, trading, or holding virtual assets using their own funds or client deposits. 

Crypto firms will have separate accounts in Pakistani rupees. Banks are required to keep these isolated from other accounts of these companies. Mixing such assets with client funds is not allowed.

In addition to existing anti-money laundering and counter-terrorism financing regulations, banks must conduct thorough checks on each VASP and update client risk assessment models considering the specifics related to crypto structures.

Financial institutions must also continuously monitor their connections with VASPs and report suspicious activities to Pakistan’s financial intelligence unit.

Gradual Easing 

Pakistan is gradually moving towards formal regulation of the industry after years of restrictions. In 2022, there was even discussion about banning all cryptocurrencies.

In March 2026, the country enacted the Virtual Assets Act. The local crypto market is now overseen by the PVARA, established in July 2025. The body issues licenses, sets anti-money laundering rules, and ensures compliance. 

The Virtual Assets Act, 2026 has been passed by Parliament, marking a major step toward establishing a comprehensive regulatory framework for Pakistan’s rapidly growing digital financial sector.

The law establishes the Pakistan Virtual Assets Regulatory Authority (PVARA), which…

— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) March 6, 2026

Previously, Pakistan invited leading global crypto companies to apply for participation in the country’s emerging digital economy and also signed a memorandum with SC Financial Technologies. This company is affiliated with World Liberty Financial, a DeFi platform run by the sons of former U.S. President Donald Trump. 

The collaboration aims to explore the use of the USD1 stablecoin for digital payments, including cross-border transfers.

In 2025, Pakistan’s authorities allocated 2 GW of electricity for bitcoin mining and AI centers.