Pakistan allows banks to open accounts for licensed VASPs, ending 2018 ban
The State Bank of Pakistan ended a 2018 ban, allowing regulated entities to open accounts for licensed virtual asset service providers.
The State Bank of Pakistan has officially ended its 2018 banking ban on cryptocurrency-related businesses, now allowing regulated financial institutions to open accounts for licensed virtual asset service providers (VASPs). The central bank's decision marks a significant policy reversal that enables legitimate crypto companies with proper licensing to access traditional banking services within Pakistan's financial system.
The original 2018 ban had effectively cut off cryptocurrency businesses from the banking sector, forcing many operators to work outside the formal financial system or relocate to more crypto-friendly jurisdictions. This prohibition was part of a broader regulatory crackdown on digital assets across several emerging markets during the crypto winter period, when many countries adopted cautious stances toward virtual currencies amid concerns about financial stability and consumer protection.
The policy change is expected to provide greater legitimacy and operational capacity for Pakistan's cryptocurrency sector, potentially attracting investment and encouraging the development of compliant digital asset businesses. Licensed VASPs will now be able to conduct standard banking operations, including fund transfers and account management, which could lead to increased institutional participation and improved market liquidity within Pakistan's crypto ecosystem.
Industry observers will be watching to see how quickly licensed VASPs begin utilizing these banking services and whether this regulatory shift encourages other South Asian countries to reconsider similar restrictions on cryptocurrency-related banking activities.
Source: The Block
