Pakistan's SBP Thaws: Banks Finally Allowed to Touch Licensed Crypto After 8-Year Freeze

In what might be the most anticipated U-turn since your uncle said he'd "just take a quick look" at your DeFi portfolio, Pakistan's central bank has lifted an eight-year ban on banks serving crypto firms. Regulated entities can now officially open accounts for licensed virtual asset service providers (VASPs) and their customers. Yes, you read that correctly—after nearly a decade of financial institutions treating crypto businesses like that weird relative nobody mentions at family dinners, the State Bank of Pakistan (SBP) has decided these firms can finally have bank accounts. The memo dropped on April 14, and the crypto community in Pakistan is experiencing emotions somewhere between "finally!" and "wait, is this real?"

In a circular dated April 14, the State Bank of Pakistan (SBP) clarified that banks may open accounts for entities licensed by the Pakistan Virtual Assets Regulatory Authority (PVARA)—the statutory body now responsible for licensing, regulating, and overseeing all virtual asset activities in the country. Think of PVARA as the new hall monitor for crypto in Pakistan, the entity that actually decides who gets to sit at the cool kids' table. This regulatory clarity is a significant departure from the previous environment where banks essentially had to guess whether servicing a crypto client would result in a regulatory slap on the wrist or a full audit from hell.

The move follows Pakistan's passage of the Virtual Assets Act 2026 in March, marking a shift toward a formal regulatory framework after years of restrictions since the outright ban in 2018. Authorities have recently signaled a more structured approach, including discussions with major exchanges such as Binance and HTX in December 2025. Pakistan has also explored blockchain-based financial infrastructure through engagements with affiliates of World Liberty Financial, including discussions around stablecoins for cross-border payments. In short, Pakistan's crypto journey has gone from "hard no" in 2018, through "maybe eventually," to "let's talk stablecoins for remittances" in 2025. The country seems to have finally realized that ignoring a $3 trillion global industry doesn't make it go away—it just sends the degens to offshore exchanges and sketchy VPNs.

Under the new framework, regulated entities cannot invest, trade or hold virtual assets using their own funds or customer deposits. Banks' role is limited to providing banking services to licensed firms. So yes, banks can now hold your VASP's fiat money, but they absolutely cannot, under any circumstances, touch the actual crypto. It's like being allowed to hold someone's pizza delivery money but not the pizza itself—you're useful, but you're not that interesting. The SBP has drawn a very clear line: banks are glorified payment processors in this arrangement, not portfolio managers. They're basically being asked to do the boring part while the VASPs handle all the fun volatile stuff.

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