Pakistan legalises virtual assets
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.
Source: Dawn
