Pakistan has introduced a new policy allowing limited banking services for the crypto sector. However, Banks barred from direct involvement in digital assets remain a key part of the framework. The move marks a shift from a complete ban to a regulated system.
The country has officially lifted its seven-year restriction on banks serving crypto-related businesses. This change allows financial institutions to support licensed companies in the sector. Despite this, Banks barred from trading, investing, or holding cryptocurrencies under any condition.
Under new rules issued by the State Bank of Pakistan, banks can work with Virtual Asset Service Providers. These providers must be licensed by the Pakistan Virtual Asset Regulatory Authority. Only approved or applying entities can access banking services under strict checks.
Banks can now open accounts for these licensed businesses. However, strict compliance rules must be followed at all times. Financial institutions are required to apply strong anti-money laundering and know-your-customer measures. These steps aim to ensure transparency and reduce financial risks.
Even with these changes, Banks barred from direct crypto exposure remains a firm policy. Banks cannot use their own funds or customer deposits to engage in crypto markets. This clear separation protects the traditional banking system from potential risks linked to digital assets.
A new system called Client Money Accounts has also been introduced. These accounts are designed specifically for crypto service providers. They must be maintained in Pakistani rupees and cannot earn interest. The accounts are limited to approved transactions only.
Cash deposits and withdrawals are not allowed in these accounts. Funds cannot be used for loans or as collateral. Banks must also keep these funds separate from regular customer accounts. This ensures better control and reduces misuse risks.
Financial institutions must also upgrade their internal systems. They are required to monitor transactions closely and report any suspicious activity. Continuous checks will be necessary to maintain compliance with regulations.
Overall, the policy reflects a balanced approach. Pakistan is opening doors to the crypto industry but with strict controls. While services are now allowed, Banks barred from direct crypto involvement ensures financial stability and risk management.
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