In a major policy shift, the State Bank of Pakistan has revoked its earlier ban on virtual currencies, signaling a new era for crypto and digital assets in Pakistan.
The move opens the door for regulated crypto activity within the country’s financial system.
The State Bank has officially withdrawn its previous circular that prohibited dealing in virtual currencies and tokens. The earlier restriction, issued under BPD Circular No 3 of April 2018, has now been repealed. In its place, the central bank has issued BPD Circular No 10 of 2026, marking a significant regulatory shift towards acceptance of digital assets.
Banks allowed to engage with crypto firms
Under the new framework, banks and financial institutions are now permitted to open accounts for Virtual Asset Services Providers (VASPs).
However, only those providers licensed by the Pakistan Virtual Asset Regulatory Authority will be eligible to operate within the banking system. This ensures oversight and compliance within the evolving crypto ecosystem.
Virtual Asset Act 2026 now in effect
The development comes as the Virtual Asset Act 2026 has officially come into force. Authorities confirmed that the Pakistan Virtual Asset Regulatory Authority (PVARA) is now fully functional and overseeing the sector.
This legal framework provides the foundation for regulating cryptocurrencies, digital tokens, and related financial services in Pakistan.
Experts describe the move as a major step forward in Pakistan’s journey toward adopting digital currencies and modern financial technologies.
They believe that formalizing the crypto sector could help bring billions of dollars held by Pakistanis abroad in digital assets into the documented economy.
According to experts, the State Bank is also expected to launch its own digital currency in the near future, further strengthening Pakistan’s position in the global digital finance landscape.
The latest policy shift reflects a broader effort to modernize the financial system, encourage innovation, and align with global trends in digital banking and cryptocurrency regulation.
