Pakistan has rolled back the crypto banking restrictions it put in place in 2018, reopening banking access for licensed virtual asset firms under a tightly controlled framework. The State Bank of Pakistan issued the directive on April 14, 2026, bringing banking rules into line with the newly adopted Virtual Assets Act. Access is back, but only with strict limits.
Banks can open accounts for licensed virtual asset firms
The central bank said commercial banks may now open accounts for licensed Virtual Asset Service Providers, provided they first verify each applicant’s regulatory status. That restores a basic financial connection between the banking sector and crypto businesses after years of separation, though eligibility is limited to firms that hold the required license.
Customer funds must be kept in separate rupee-denominated accounts known as Client Money Accounts. Those balances cannot be mixed with a firm’s operating funds. The rule is specific and narrow: banks may provide financial services, but they cannot blur the line between client money and company capital.
Banks remain barred from holding or trading crypto
The new rules also draw a firm boundary around what banks cannot do. They are not allowed to hold or trade crypto assets themselves, and they cannot use customer deposits for any crypto-related exposure. Their function stays focused on banking services, compliance checks, and account oversight rather than direct participation in digital asset markets.
Regulators also said existing foreign exchange rules and other regulatory requirements remain fully in force. Banking access for crypto firms does not create an exemption from the broader financial rulebook. If anything, the compliance burden on banks is now more clearly defined.
Ongoing monitoring and suspicious activity reporting are mandatory
Restoring access comes with heavier due diligence obligations. Banks must assess the risks linked to each licensed crypto firm and revise internal risk models so they reflect exposure connected to digital asset businesses.
The monitoring requirement continues after onboarding. If suspicious activity is detected, banks must report it to Pakistan’s Financial Monitoring Unit in line with anti-money laundering and counter-terror financing rules. Regulators also made clear that serving crypto firms does not reduce a bank’s responsibility for oversight; each institution remains fully accountable.
Policy shift follows the March 2026 Virtual Assets Act
The banking change comes after Pakistan passed the Virtual Assets Act in March 2026. That law created the Pakistan Virtual Assets Regulatory Authority to supervise the sector. The latest move is not an isolated step; it sits within a broader regulatory structure that now includes legislation, oversight, and controlled banking access.
Pakistan had already been in discussions with firms including Binance and HTX, pointing to deeper engagement with global crypto platforms. Authorities were also exploring blockchain infrastructure connected to cross-border payments. The source material says Pakistan signed agreements involving World Liberty Financial, including work tied to a dollar-pegged stablecoin, and that another deal with Binance may support tokenization of as much as $2 billion in assets.
From restoring bank accounts to banning banks from direct crypto exposure, Pakistan is shifting from blanket restriction to supervised participation, with the boundaries now spelled out in formal rules.