"The rescission letter permits regulated banks to provide services to VASPs registered with PVARA, setting conditions that require client crypto funds to be in segregated accounts. Banks cannot hold, trade, or invest in virtual assets with their own balance sheet or customer money."
"The 2018 prohibition cut banks off from any engagement with crypto firms or users, intended to contain fraud and capital flight. However, Pakistani users did not stop trading and instead moved to peer-to-peer channels and offshore exchanges."
"The ban created a regulatory blind spot, as the country's freelancer base faced challenges with inefficient and expensive workarounds for USD earnings, which often moved through stablecoins informally."
Regulated banks in Pakistan are now allowed to provide services to Virtual Asset Service Providers (VASPs) registered with PVARA, under strict conditions. Client crypto funds must be kept in segregated accounts, and banks cannot hold or trade virtual assets. Each VASP client must undergo screening against AML and sanctions obligations. The previous 2018 ban on crypto led to increased informal trading methods, creating regulatory blind spots. The recent institutional engagement includes a Letter of Intent between Binance and the Fauji Foundation, signaling a shift in the regulatory landscape.
Read at news.bitcoin.com
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