Pakistan Ends Bitcoin and Crypto Banking Ban, Opens Financial System to Licensed Firms

Pakistan's central bank has officially reversed its ban on banking services for cryptocurrency firms, enabling regulated banks to provide accounts to licensed Virtual Asset Service Providers (VASPs). This significant shift, formalized by the State Bank of Pakistan following the enactment of the Virtual Assets Act 2026, represents the country's first structured effort to integrate digital asset businesses into its mainstream financial system. Bilal bin Saqib, chairman of the Pakistan Virtual Asset Regulatory Authority, stated this is a foundational step.

Under the new framework, banks must conduct thorough due diligence, maintain risk profiles for VASP clients, and report suspicious activities. Client funds must be held in segregated, non-interest-bearing Pakistani rupee accounts, with commingling strictly forbidden. However, banks are prohibited from directly investing in, trading, or holding cryptocurrencies, with their role confined to facilitating payment rails and fiat custody for licensed crypto activities. This policy marks a departure from the 2018 ban that hindered crypto industry growth. Pakistan is now aiming to become a regulated hub for digital asset innovation, evidenced by previous MOUs with Binance and HTX for potential tokenization initiatives and regulatory clearances.

(Source：Bitcoin Magazine)