Pakistan Crypto Banking Ban Lifted: Licensed VASPs Can Bank Under PVARA Rules

Pakistan crypto banking ban removal marks a shift from a 2018 blanket restriction to a controlled, license-based framework. On April 14, the State Bank of Pakistan replaced the earlier prohibition with BPRD Circular Letter No. 10, allowing banks to work with PVARA-authorized Virtual Asset Service Providers (VASPs). The Pakistan crypto banking ban removal requires each bank to verify the firm’s PVARA license and open segregated, non-interest client money accounts in Pakistani rupees. New safeguards limit risk transfer. Banks cannot use client money to invest in crypto assets and must not hold digital assets tied to customer funds. Operational rules also restrict cash deposits/withdrawals, prohibit loans or collateral from the special accounts, and bar mixing VASP funds with customer funds. Banks must upgrade crypto-related risk controls and comply with anti-money-laundering suspicious transaction reporting. The framework is grounded in the Virtual Assets Act 2026, which sets PVARA as the main regulator. For traders, the change improves compliance visibility for institutional participation, and it may support broader market confidence rather than directly changing token fundamentals. Pakistan also previously signaled institutional intent via an MoU with Binance to explore tokenization (up to $2B) of instruments such as bonds and treasury bills.