The State Bank of Pakistan (SBP) issued BPRD Circular Letter No. 10 of 2026, formally lifting the blanket ban on cryptocurrency-related banking services that had been in place since 2018. Banks and other SBP-regulated financial institutions can now open and maintain bank accounts for Virtual Asset Service Providers (VASPs) that are duly licensed by the newly established Pakistan Virtual Asset Regulatory Authority (PVARA).
This also extends to their customers under certain conditions. The move replaces the old 2018 circular (BPRD Circular No. 03 of 2018) that prohibited dealing in virtual currencies and tokens. It follows the enactment of the Virtual Assets Act, 2026, which created PVARA as the dedicated regulator for licensing, supervision, and oversight of virtual asset activities.
Banks cannot trade or hold crypto: Financial institutions remain barred from investing in, trading, or holding virtual assets themselves using their own funds or customer deposits. Accounts for VASPs must be segregated, denominated only in Pakistani rupees, non-interest bearing, and subject to strict rules (no cash deposits in some cases).
Banks must perform enhanced due diligence, KYC, risk profiling, and report suspicious transactions under anti-money laundering (AML) and counter-terrorism financing rules. They are fully responsible for these obligations. This represents a significant policy shift toward regulated integration rather than outright prohibition.
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Pakistan has a large crypto user base estimates suggest millions of active users and substantial trading volume, and bringing licensed firms into the formal banking system could improve liquidity, consumer protection, and oversight while reducing risks from unregulated offshore platforms.
This development aligns with broader global trends of countries moving from bans to frameworks that allow controlled crypto activity under licensing regimes. Licensed Virtual Asset Service Providers (VASPs) under the Pakistan Virtual Assets Regulatory Authority (PVARA) can now access segregated, PKR-denominated bank accounts.
This brings an estimated 27–40 million crypto users and a ~$25 billion annual trading volume market out of the gray and underground space into the regulated financial system. Crypto businesses gain easier on and off-ramps, better cash management, and legitimacy, reducing reliance on informal or offshore channels.
Potential for faster, cheaper cross-border transfers; Pakistan receives billions in remittances yearly. Could attract foreign investment in local fintech and encourage innovation in regulated digital asset services. Strict AML/CFT, KYC, and due diligence rules apply, lowering risks of money laundering while providing a clearer legal framework for users and businesses.
Positions Pakistan as moving toward regulated crypto adoption in a high-population emerging market, potentially increasing tax revenue and financial inclusion over time. Banks cannot trade, invest, hold crypto, or use customer funds for it — accounts remain ring-fenced to protect the traditional banking system.
Heavy regulatory requirements on banks and VASPs; enhanced monitoring, reporting could slow initial rollout or raise operational costs for smaller players. Focuses on banking access for licensed entities; full crypto trading, custody, or broader adoption still depends on PVARA licensing and enforcement. Unlicensed activity remains penalized.
This is a controlled transition from prohibition to regulation, not full liberalization. Short-term effects include greater legitimacy and liquidity for the existing large crypto user base. Longer-term impacts could include modernized remittances, fintech growth, and better oversight — while managing volatility and illicit finance risks. Implementation will hinge on how quickly PVARA licenses firms and how banks adapt their risk systems.
