State Bank Finally Ends Ban on Crypto Companies

State Bank of Pakistan on Tuesday formally legalised and encouraged the use of virtual assets by implementing the Virtual Assets Act 2026, marking one of the biggest regulatory changes in Pakistan’s digital finance space in recent years.

Under the new law, the Pakistan Virtual Asset Regulatory Authority (PVARA) has been established as the statutory body responsible for licensing, regulating, supervising, and overseeing all virtual asset related activities in the country.

The move effectively creates Pakistan’s first formal legal framework for crypto and digital asset businesses.

The central bank said its regulated entities, including banks and financial institutions, may now open bank accounts for companies licensed by PVARA as Virtual Asset Service Providers (VASPs).

This means licensed crypto exchanges, wallet providers, digital asset platforms, and related fintech companies can now access Pakistan’s formal banking system, provided they meet strict compliance and licensing conditions.

Banks have been directed to verify the authenticity of every VASP’s license before onboarding them and maintain separate client money accounts for customer transactions.

These accounts will be rupee-denominated and non-interest-bearing, while cash deposits and withdrawals will not be allowed. The SBP has also imposed strict anti-money laundering and compliance requirements.

Banks must conduct enhanced due diligence, closely monitor customer onboarding processes, risk profiles, and suspicious transactions, and report any concerns under Pakistan’s anti-money laundering laws.

A major safeguard is that banks themselves cannot invest in, trade, or hold virtual assets using their own funds or customer deposits. This means the legalisation currently applies mainly to regulated access, payments, custody, and service infrastructure, rather than allowing banks to directly speculate in crypto assets.

Pakistan had previously maintained a highly restrictive stance on crypto and digital assets, with banking channels largely closed to such businesses.

This new framework signals a major shift toward regulated adoption of digital finance and blockchain-linked services, while keeping strong compliance controls in place.