Pakistan opens banking access to licensed crypto

TLDR

Pakistans central bank has formally allowed banks to serve licensed crypto firms, reversing a years-long banking ban while keeping tight controls on risk.

1. Pakistan now lets banks open accounts for virtual asset firms licensed under the new Virtual Assets Act 2026, overturning a 2018 restriction that excluded crypto from banking.
2. Banks still cannot trade or hold crypto themselves and must keep client money in segregated, non-interest-bearing local currency accounts with full AML monitoring.
3. The big variable is how fast PVARA licenses are issued and which firms qualify, which will determine real-world access for Pakistani users and exchanges.

Deep Dive

1. What Has Actually Changed

Pakistans central bank has opened the formal banking system to licensed virtual asset service providers (VASPs), allowing banks to open accounts for firms approved by the Pakistan Virtual Assets Regulatory Authority (PVARA) under the Virtual Assets Act 2026.

This move explicitly reverses a 2018 directive that had effectively blocked banks from dealing with crypto-linked entities, marking Pakistans first structured attempt to bring crypto businesses into the regulated financial system instead of keeping them entirely outside it.

A detailed policy description notes that banks can serve only firms whose regulatory status they have verified with PVARA and only within a compliance-heavy framework that ties ongoing banking access to proper licensing and reporting.

2. How Access Works And Key Limits

Despite the opening, banks remain barred from investing in crypto assets, trading them on their own books, or holding them on behalf of clients, according to the central banks framework described in a recent policy summary.

Customer funds related to these firms must sit in segregated, non-interest-bearing Pakistani rupee accounts, with banks required to maintain strict transaction monitoring, due diligence, and suspicious activity reporting under existing financial crime rules.

This keeps traditional lenders in a narrow role as fiat rails and compliance gatekeepers, while direct crypto exposure and sector supervision sit with PVARA.

3. Why It Matters And What To Watch

For licensed exchanges, brokers, and custodians, this can remove one of the biggest practical barriers in Pakistan: handling payroll, vendor payments, and fiat on- and off-ramps through regulated bank accounts instead of informal workarounds.

Regionally, Pakistan now moves closer to peers like the UAE and parts of Africa that are building licensing-based frameworks, as noted in broader MEA regulatory coverage that includes Pakistans shift back from a full banking ban.

The key questions now are how demanding PVARAs licensing process proves in practice, how many local and global firms receive licenses, and whether future updates loosen or tighten bank involvement if AML or fraud problems emerge.

Conclusion

Pakistans shift from blanket banking exclusion to license-based access signals that crypto in the country is moving from the grey zone into a supervised, bank-connected model. The near-term effect will depend on how quickly credible firms secure PVARA licenses and how consistently banks implement the rules, but the direction is clear: regulated participation for compliant players, with banks acting as tightly controlled fiat gateways rather than direct crypto risk takers.