Years Restrictions Pakistan Lets Banks Support Regulated Crypto Businesses

Pakistan has lifted its eight-year restriction on virtual asset activity, allowing banks to provide services to licensed crypto firms. This move follows the Virtual Assets Act 2026, which establishes a formal regulatory structure.

Regulatory Framework

The State Bank of Pakistan has issued BPRD Circular Letter No. 10 of 2026, enabling regulated entities to open and maintain bank accounts. This update follows the approval of the Virtual Assets Act 2026 in March, which outlines licensing, compliance, and supervisory mechanisms for the industry.

Key Provisions

• Banks can provide services to licensed crypto firms, but cannot trade or hold crypto themselves.
• Institutions must create separate accounts for client funds, known as Client Money Accounts, denominated in Pakistani rupees.
• Banks are required to apply enhanced due diligence procedures, update risk models, and continuously monitor transactions linked to crypto firms.

Impact on Crypto Adoption

Pakistan's decision aligns with a global trend toward regulated crypto adoption rather than outright bans. By allowing banks to support licensed firms while enforcing strict controls, the country positions itself to capture innovation without abandoning financial safeguards. According to the Pakistan Virtual Assets Regulatory Authority, this move reflects a broader change in regulatory thinking.

Benefits of Regulated Crypto Adoption

The new framework draws a clear boundary between service provision and direct exposure. Banks are not allowed to invest in or hold virtual assets, whether using their own capital or customer deposits. This approach signals that oversight remains central even as access expands. Pakistan has taken an important step toward formalising its virtual asset ecosystem, with potential benefits for fintech growth and institutional participation.

Key Takeaways

• Pakistan has lifted its eight-year restriction on virtual asset activity, allowing banks to provide services to licensed crypto firms.
• The Virtual Assets Act 2026 establishes a formal regulatory structure for the industry.
• Banks are required to apply enhanced due diligence procedures and continuously monitor transactions linked to crypto firms.
• Pakistan's decision aligns with a global trend toward regulated crypto adoption.

Frequently Asked Questions

What is the Virtual Assets Act 2026?

The Virtual Assets Act 2026 is a law that establishes a formal regulatory structure for the virtual asset industry in Pakistan.

Can banks trade or hold crypto themselves?

No, banks are not allowed to invest in or hold virtual assets, whether using their own capital or customer deposits.