Pakistan Introduces New Law to Legalize and Regulate Virtual Assets

Karachi: The State Bank of Pakistan has implemented a new legal framework to grant formal recognition to virtual assets, marking a significant shift in the country’s financial and regulatory landscape.
According to an official statement, the central bank has withdrawn its 2018 circular on virtual currencies and replaced it with a comprehensive regulatory framework. Under the new system, the Pakistan Virtual Assets Regulatory Authority will be responsible for licensing and supervising Virtual Asset Service Providers (VASPs).
The central bank stated that regulated financial institutions will now be allowed to open accounts for licensed VASPs, subject to strict compliance requirements. Banks will be required to verify licenses before offering services and ensure proper monitoring of these entities.
The framework mandates that client funds be held in separate accounts, with strict prohibition on mixing funds. These accounts will be maintained in Pakistani rupees, and cash deposits or withdrawals will not be permitted.
Additionally, banks will be responsible for conducting due diligence on VASPs and ensuring ongoing compliance. Suspicious transactions must be reported to the Financial Monitoring Unit (FMU), and all relevant laws and regulations must be strictly followed.
The State Bank also clarified that banks will not be allowed to invest in virtual assets using their own or customers’ funds.
Under the new policy, virtual asset companies must maintain separate client money accounts, while firms holding No Objection Certificates (NOCs) will be allowed limited account operations.
Bilal Bin Saqib, Chairman of the regulatory authority, described the development as a foundational step toward integrating virtual assets into Pakistan’s formal financial system, adding that providing banking access to licensed entities will enhance transparency and strengthen regulatory oversight.