SBP opens door to crypto, Virtual Assets Act 2026 ratified

Pakistan has formally brought virtual assets into its legal framework, marking a major shift in financial policy as the State Bank of Pakistan (SBP) announced the implementation of the Virtual Assets Act 2026.

Under the new law, a dedicated regulator, the Pakistan Virtual Asset Regulatory Authority (PVARA), has been created to manage licensing, compliance, and oversight of businesses dealing in digital assets. The move signals the government’s intent to both legitimise and regulate the sector while maintaining strict financial safeguards.

According to the SBP, banks and other regulated financial institutions can now provide services to companies registered as Virtual Asset Service Providers (VASPs), but only after verifying their licences with PVARA. These institutions must maintain detailed records and ensure that all interactions comply with regulatory requirements, said an article by DAWN News on Wednesday.

To strengthen financial transparency, banks will be required to create separate rupee-based accounts, known as client money accounts, for VASPs. These accounts are strictly for transaction settlements and come with tight restrictions: no cash deposits or withdrawals, no profit payments, and no use of funds as collateral. Additionally, VASP funds must remain fully segregated from client holdings to prevent misuse.

The central bank has also reinforced strict compliance with anti-money laundering and counter-terror financing rules. Financial institutions must conduct enhanced due diligence on VASPs, assess their business models, and continuously monitor transactions. Any suspicious activity must be reported under existing legal frameworks.

While banks may assist firms in obtaining licences through limited-purpose accounts, they are prohibited from directly investing in or trading virtual assets using their own or customer funds. They remain fully accountable for adhering to all financial and foreign exchange regulations.

Overall, the policy introduces a controlled pathway for integrating virtual assets into Pakistan’s financial system, balancing innovation with regulatory oversight.