Pakistan has opened a regulated banking channel for licensed digital asset firms, reversing restrictions introduced in 2018 that effectively barred banks from servicing the crypto sector. The shift enables approved providers to integrate with the banking system under strict oversight and risk controls.
Policy Shift Reverses 2018 Banking Restrictions
The move marks a significant change from a 2018 directive by the State Bank of Pakistan that prohibited banks and payment companies from dealing in cryptocurrencies and related businesses. Authorities have now created a framework that permits regulated access, signaling a more structured approach to supervising digital asset activities in the country.
Controlled Access for Licensed Firms
Under the new approach, only licensed digital asset service providers can access banking services. Integration will be subject to stringent compliance requirements designed to mitigate financial crime and operational risks.
- Banks must apply enhanced due diligence and ongoing monitoring when onboarding and servicing crypto-related clients.
- Regulated firms are expected to maintain robust controls for anti–money laundering and counter-terrorist financing.
- Access is limited to authorized entities, with continued oversight by financial regulators.
Implications for the Market
Allowing compliant crypto firms to interface with banks could improve transparency, payments connectivity, and consumer protections within Pakistan’s digital asset ecosystem. The framework aims to balance innovation with risk management, aligning local oversight with standards seen in other jurisdictions.
Key Takeaways
- Pakistan has enabled licensed crypto firms to access banking, reversing its earlier blanket restriction.
- Banks must implement strict due diligence, monitoring, and risk controls when servicing digital asset businesses.
- The framework provides regulated, limited access rather than a broad liberalization of crypto activities.