• SBP says strict AML/CFT rules apply for banks, VASPs
• PVARA to oversee licensing, supervision

KARACHI: The State Bank of Pakistan (SBP) announced a significant policy change on Tuesday, legalising and encouraging the use of virtual assets through the enactment of the Virtual Assets Act 2026.

“The act has been enacted, pursuant to which the Pakistan Virtual Asset Regulatory Authority (PVARA) has been established as the statutory authority responsible for the licensing, regulation, supervision and oversight of virtual asset activities in Pakistan,” said a circular issued by the central bank, adding that the new instructions will take effect immediately.

“Subject to strict compliance with the conditions outlined herein, SBP Regulated Entities (REs) may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs),” said the circular.

Prior to onboarding a VASP or initiating any activity with it, REs shall obtain and retain a copy of the VASP’s valid licence issued by PVARA and on record, and independently verify its authenticity with PVARA.

“The REs will open separate transactional accounts, i.e. client money accounts (CMAs), for the settlement of authorised transactions of licensed VASPs, where applicable, based on the VASP’s business model to deliver permissible services to their clients,” said the circular.

Strict segregation between CMAs and other types of accounts of VASPs will be ensured, and commingling of VASP funds with those of their clients will be strictly prohibited, it added.

The CMAs will be rupee-denominated, non-remunerative accounts for the purpose of executing authorised transactions of licensed VASPs. Further, cash deposits and cash withdrawals will not be permitted in CMAs. Moreover, funds held in CMAs will not be used as collateral or security for any form of financing or credit facilities extended to VASPs.

In addition to the customer due diligence (CDD) requirements under Regulation-2 of the Anti-Money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) Regulations, REs will conduct CDD of the VASP and gather sufficient information about the VASP to understand the nature and scope of its business, specific activities it conducts, customer onboarding process, customer base, and the geographic markets in which it operates.

REs will also make appropriate amendments to their customer risk profiling (CRP) model to account for risks posed by VASPs.

Using the amended CRP model, the REs will appropriately risk-rate the VASPs and ensure that risk-based controls and monitoring mechanisms are effectively implemented.

REs will monitor their relationships with VASP(s) on an ongoing basis and report any suspicious transactions to FMU in accordance with the requirements of the Anti-Money Laundering Act 2010.

They will ensure compliance with all relevant laws and regulations, including, but not limited to, the Anti-Money Laundering Act, 2010, and SBP’s AML/CFT/CPF Regulations.

Banks may also open limited-purpose accounts of entities holding NOCs issued by PVARA, enabling them to complete formalities for obtaining a license from PVARA.

Only upon the grant of a license by PVARA, the bank can extend additional services (including virtual assets-related transactional activity) subject to strict compliance with the instructions as outlined above.

REs will not invest, trade, or hold virtual assets using their own funds or customer deposits; they will also remain responsible for compliance with all applicable SBP regulations, including foreign exchange regulations, and any arrangement with a VASP will not absolve them of such responsibility.

Published in Dawn, April 15th, 2026