SBP allows banks to provide service to licenced crypto service providers

ISLAMABAD: The State Bank of Pakistan has allowed licenced virtual asset service providers to open bank accounts, marking a major shift from its earlier restrictions on crypto-related businesses.

The move effectively overrides a 2018 ban and comes after the enactment of the Virtual Assets Act, 2026, according to a circular issued by the State Bank of Pakistan and a statement from the country’s virtual asset regulator.

The decision represents Pakistan’s first formal step towards integrating digital assets into the regulated financial system under strict anti-money laundering and compliance requirements.

“This is a foundational step in bringing virtual assets into the formal financial system of Pakistan,” said Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority.

Under the new framework, banks will be required to verify licences issued by the newly formed regulator before onboarding virtual asset firms. They will also be required to maintain segregated, non-interest-bearing rupee accounts for clients.

The central bank said financial institutions will remain responsible for due diligence, risk profiling and reporting suspicious transactions. It added that banks will not be allowed to invest in or hold virtual assets using their own funds or customer deposits.

Pakistan has in recent months stepped up engagement with global crypto and blockchain players. In December, it signed an agreement with Binance to explore tokenisation of up to $2 billion in assets and issued initial clearances to Binance and HTX for licensing discussions.

In January, Pakistan also signed a deal with an affiliate of World Liberty Financial to explore stablecoin-based cross-border payment systems.

Officials say the latest move signals a broader effort to modernise the financial system while maintaining regulatory oversight over emerging digital asset markets.