Pakistan's central bank has reversed a 2018 ban, now permitting banks to open accounts for licensed virtual asset service providers (VASPs). This move allows regulated entities to onboard VASPs accredited by the Pakistan Virtual Asset Regulatory Authority (PVARA).
Banks must establish separate, non-interest-bearing Client Money Accounts (CMAs) for VASP activities, strictly segregating client funds. These accounts will be denominated in Pakistani Rupees and prohibit cash transactions or use as collateral. Enhanced due diligence, continuous transaction monitoring, and suspicious activity reporting are mandated.
The framework, enacted under the Virtual Assets Act of 2026 and PVARA, aims to protect investors and foster blockchain innovation while enforcing anti-money laundering standards. The previous ban had pushed crypto activity underground, leading to a significant surge in peer-to-peer transactions and informal networks.