Islamabad, April 15, 2026. The State Bank of Pakistan has issued a directive allowing commercial banks to open accounts for crypto companies that hold a valid government license, formally ending a prohibition that had been in place since 2018.

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ISLAMABAD | Pakistan's central bank issued BPRD Circular Letter No. 10 of 2026 on April 15, instructing all SBP-regulated banks, microfinance banks, development financial institutions, payment system operators, and other financial institutions that they may now open and maintain accounts for businesses licensed by the Pakistan Virtual Asset Regulatory Authority (PVARA). The circular explicitly replaces BPRD Circular No. 03 of 2018, which had directed every bank, microfinance bank, development financial institution, and payment system operator in the country to stop processing, trading, or investing in virtual currencies. For Pakistan's estimated 27.1 million active crypto users, with broader market participation estimates exceeding 40 million, the policy shift marks the first time the formal banking system and the digital asset sector have been permitted to operate in the same room.

The accounts created under the new rules are tightly defined. Banks may open what the circular calls Client Money Accounts, or CMAs, for licensed Virtual Asset Service Providers (VASPs). These accounts are PKR-denominated, non-remunerative, and carry explicit restrictions: no cash deposits or withdrawals are permitted, and CMA funds cannot be pledged as collateral or used to secure credit lines. Banks themselves remain prohibited from trading, investing in, or holding virtual assets with their own funds or customer deposits. The framework is designed to give licensed crypto firms a legitimate banking relationship while keeping banks from taking direct exposure to crypto markets.

Compliance requirements for banks are substantial. The circular requires enhanced due diligence on VASP clients, revised customer risk profiling models that account for crypto-specific risks, continuous transaction monitoring, and mandatory reporting of suspicious transactions to the Financial Monitoring Unit under Pakistan's Anti-Money Laundering Act 2010. Banks must independently verify that any VASP client holds a current PVARA license before opening an account.

The circular is the operational banking layer of a regulatory architecture that has been assembled over the past year. Pakistan established the Pakistan Crypto Council in March 2025 to coordinate blockchain and crypto integration into the broader economy. The regulatory timeline is also shaped by Pakistan's experience on the Financial Action Task Force grey list, which the country joined in 2018 and exited in 2022. That grey-list period contributed directly to the original banking restrictions on virtual currencies and made robust anti-money-laundering frameworks a prerequisite for any subsequent liberalisation. A presidential ordinance in July 2025 created PVARA as a temporary body. President Asif Ali Zardari signed the Virtual Assets Act 2026 into law in March, giving PVARA permanent statutory status and a governing board that includes the SBP Governor, the SECP chairman, the FBR chairman, the Director General of the Federal Investigation Agency, the head of the Digital Pakistan Authority, key federal secretaries, and two independent directors, for a total of eleven seats. Penalties for operating without a license reach up to PKR 50 million (roughly $179,000) and five years in prison.

There is a critical gap between the framework and what retail users can actually access today. No domestic exchange has received a full PVARA operating license yet. Binance and HTX received No Objection Certificates from PVARA in December 2025, which represent only the first of three licensing phases. Phase two requires SECP registration and a physical office in Pakistan. Phase three involves a full audit of cybersecurity infrastructure, capital adequacy, and risk management systems. Until at least one exchange clears all three phases, the SBP circular enables a banking architecture that has no licensed counterparty on the other side. Most retail users in Pakistan continue to trade through peer-to-peer channels on international platforms.

PVARA Chairman Bilal Bin Saqib MBE, speaking to CoinDesk in February 2026, framed the regulatory push in terms of financial inclusion rather than market development. "We have over 100 million unbanked citizens, people who have no saving tools, no investment tools, no way to break out of their economic class," he said. "Crypto and blockchain are not a luxury for Pakistan. It's a ladder for the masses." Pakistan's unbanked adult population represents roughly 53 percent of all adults in the country.

The numbers that shaped this policy decision are hard to ignore. Pakistan ranked third globally in Chainalysis's 2025 crypto adoption index, behind only India and the United States. Monaquatorium reported Pakistan's total crypto transaction volume in 2025 reaching approximately $300 billion, with a narrower measure of counted volume estimated at around $25 billion. Remittances account for nearly 9.4 percent of GDP, with a record $4.1 billion entering the country in March 2025 alone. Blockchain-based remittance corridors could reduce transfer costs from around 7 percent per transaction to below 2 percent, according to blockchain.news.

Across South Asia, the policy contrast is sharp. India maintains a 30 percent flat tax on crypto income and a 1 percent tax deducted at source on qualifying transactions, with no equivalent VASP banking integration framework in place. Bangladesh maintains an outright prohibition. Sri Lanka has not enacted material crypto legislation. Pakistan has moved faster than any of its neighbours toward a complete licensing and banking regime, though the test of that framework will be when the first domestic exchange receives a full operational license and retail users gain access to a bank-connected regulated platform.

Bilal Bin Saqib MBE has also confirmed that Pakistan is developing a sovereign stablecoin, and reports indicate a strategic Bitcoin reserve is under active discussion at the government level. The SBP circular is one piece of a broader state strategy, not simply a regulatory correction. How quickly PVARA processes the remaining licensing applications will determine whether the framework produces working infrastructure or remains, for now, a well-constructed waiting room.