Pakistan Removes Ban on Banks Dealing with Cryptocurrencies

Pakistan has taken a major step towards embracing cryptocurrencies by lifting its 8-year ban on banks dealing with digital currencies. The State Bank of Pakistan (SBP), the country's central bank, issued a notice to banks on April 14, allowing them to open and maintain accounts for licensed Virtual Asset Service Providers (VASPs).

The decision follows the enactment of the Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to license and regulate virtual asset activities in the country. Under the new regulations, SBP-regulated entities can now open segregated Pakistani Rupee-denominated Client Money Accounts for PVARA-licensed VASPs.

This move is expected to have a significant impact on Pakistan's economy, as roughly 40 million people, or 17% of the population, are already invested in cryptocurrencies. The country's ranking as one of the top three countries globally in terms of cryptocurrency adoption also positions it as an attractive destination for institutional crypto investors.