Pakistan opens its doors to digital capital: 40 million savers now have free rein to trade cryptocurrencies

Pakistan has lifted its banking ban on cryptocurrencies under the new Virtual Assets Act. Discover how this regulation will impact 2026.

The Reserve Bank of Pakistan has officially lifted the ban that prevented financial institutions from processing transactions related to digital assets since 2018. This decision, communicated through a notice to all banks and payment system operators, marks a shift in the country's monetary policy towards the integration of the digital economy. 

The monetary authority thus replaces the old prohibitive circular with a supervised opening frameworkallowing regulated entities to open accounts to virtual asset service providers (VASPs) that have an official license.

The country's recent move responds to the need to channel an activity that already involves about 40 million citizens, equivalent to 17% of the national population. By formalizing access to crypto assets through banking channels, the government seeks to mitigate the risks of the gray market and strengthen oversight of capital flows. 

According to experts in the field, the measure does not imply deregulation for the crypto industry in the country, but rather the beginning of a phase of technical coexistence where the traditional banking system acts as a filter for companies in the sector. With the entry into force of the Virtual Assets Act of 2026The country establishes a legal infrastructure that provides legal certainty to the crypto industry. 

New financial regulations for banks entering the crypto market

The new regulations Pakistan establishes a clear barrier between bank balance sheets and the intrinsic volatility of crypto assets. 

According to the guidelines issued by the Director of the Central Bank, Syed Mansoor AliFinancial institutions are prohibited from investing their own funds or their clients' deposits in cryptocurrencies, a restriction established to safeguard the stability of the traditional financial system against possible corrections in the digital market. 

Thus, Pakistani banks are only authorized to operate as operational intermediaries, facilitating the settlement of funds in rupees through segregated customer money accounts.

The bank also reported that these accounts must meet strict operating requirements, such as not generating interest, prohibiting cash deposits or withdrawals, and not being used as collateral to obtain financing. 

The legislation also requires that the resources of users of virtual asset platforms remain completely separate from the financial activities of the provider companies.

To ensure the entire system adheres to this structure, banks will need to update their risk management methodologies and strengthen their verification processes. Before establishing any business relationship, they will be required to confirm the validity of licenses issued by the Virtual Asset Regulatory Authority of Pakistan, thereby guaranteeing a more transparent and controlled environment.

The blockchain revolution is advancing in Pakistan

The cornerstone of this regulatory opening is the newly created Pakistan Virtual Asset Regulatory Authority, known as PVARA. As reported This media outlet reported last month that this is the body responsible for supervising, licensing, and penalizing any illegal activity in the digital ecosystem. 

The launch of this agency has allowed the country to explore larger-scale initiatives within the blockchain industry, such as the strategic agreement for tokenize national assets worth $2.000 billionThis project includes the digitization of Treasury bonds and commodity reserves, seeking to attract foreign investment through the efficiency e immutability that blockchain offers in securities settlement.

In short, the government maintains a growth-oriented vision, fostering innovation and trust in digital assets as part of economic development. With these decisions, Pakistan positions itself among the group of countries seeking to leverage the potential of blockchain technology to create a more dynamic, inclusive financial environment, better prepared for the technological challenges of the future.