Pakistan Allows Licensed Crypto Firms Access to Bank Accounts After Eight-Year Ban

Pakistan's State Bank has taken a significant step in regulating the country's cryptocurrency market by allowing licensed Virtual Asset Service Providers (VASPs) to access bank accounts.

The decision, which reverses an eight-year ban, aims to integrate digital assets into Pakistan's economic framework while maintaining oversight mechanisms. The move is seen as a strategic step towards formalizing the previously opaque sector.

The State Bank has issued new guidelines that require licensed VASPs to present their government-issued licenses for verification before opening bank accounts. However, banks are prohibited from investing customer deposits in cryptocurrencies or holding such digital assets on their balance sheets.

The new framework categorizes VASPs into different types, including crypto exchanges, custodial wallet providers, digital asset brokers, and ICO platforms. Banks must conduct enhanced due diligence on all VASP clients, monitor transactions for suspicious activity, and report regularly to the central bank.