Can your bank close your account over crypto? What the State Bank's 2026 circular says

Key takeaways

• In April 2026 the State Bank replaced its 2018 instruction that barred banks from dealing in virtual currencies.
• Banks may now open accounts for PVARA-licensed crypto firms. Firms holding only a no-objection certificate get limited-purpose accounts.
• The circular says nothing about individual customers who trade crypto. Banks' normal anti-money-laundering duties still apply to them.
• Banks themselves may not invest in, trade or hold crypto, with their own money or with depositors' money.

Many Pakistanis who trade USDT on peer-to-peer (P2P) markets have had the same experience. Rupees arrive from a stranger, and days later the bank account is restricted or the bank asks questions. Others hear that the State Bank has "legalised" crypto and assume this can no longer happen.

Both views miss what the State Bank actually said. Its BPRD Circular Letter No. 10 of 2026, dated 14 April, is short. It is about banks and crypto firms, not banks and you.

What changed in April

The circular "replace[s]" BPRD Circular No. 03 of 2018, the instruction that told banks not to deal in virtual currencies. In its place, banks "may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers", on strict conditions:

• Check the licence. Before onboarding a crypto firm, a bank must get a copy of its PVARA licence and verify it independently with PVARA.
• Separate client money. Banks open Client Money Accounts to settle licensed firms' customer transactions. These are rupee accounts that pay no profit and allow no cash deposits or withdrawals. A firm's own money may not be mixed with its clients'.
• No-objection certificates get less. A firm with only a PVARA no-objection certificate can have a limited-purpose account to complete its licensing paperwork. Trading-related services wait for a full licence.
• Banks stay out of crypto themselves. Paragraph 6 says banks "shall not invest, trade or hold virtual assets using their own funds or customer deposits".

As of 15 October, PVARA had licensed no crypto firm. Its chairman has said it received 75 applications, as we reported. So the main new permission in the circular has not yet been used.

What it doesn't say

The circular does not mention individual customers who buy or sell crypto, or P2P trading. It neither protects nor prohibits them.

What it does repeat is that banks must monitor crypto-related relationships and "report any suspicious transaction" to the Financial Monitoring Unit (FMU) under the Anti-Money Laundering Act, 2010. Those duties already applied to every account. A pattern of many incoming transfers from unrelated people, followed by quick outgoing ones, is the kind of activity bank monitoring is built to flag. That is true whether or not crypto is involved.

So the honest answer to "can my bank close my account over crypto?" is that the circular does not stop it. A bank can still ask about your activity, restrict an account while it reviews it, or decide to end the relationship under its own risk policy.

What the courts have said about P2P money

A Lahore High Court bail order, 2026 LHC 4849, dealt with a case where investigators traced 351 transactions through 237 bank accounts. The judge held that receiving rupees for USDT in a P2P trade was not, on its own, proof of fraud. He also said the 2018 circular had been addressed to banks and did not create a crime for individuals.

That helps sellers who did nothing but receive payment for USDT they delivered. It does not stop a bank from reviewing an account, and it does not stop investigators from asking questions. We covered what the ruling does and doesn't say in detail.

What this means for Pakistani users

• "SBP lifted the ban" is about crypto firms, not you. Banks can now serve licensed firms. No firm is licensed yet.
• Expect questions if your account looks like a business. Many small transfers from strangers can trigger a review whatever the reason. Using a personal account for high-volume P2P trading is the risk most often reported.
• Keep records of every trade. Order IDs, the buyer's or seller's details shown by the platform, and chat logs let you explain a payment if your bank asks.
• Check where a payment really comes from. Some P2P frauds use stolen or third-party money. If funds arrive from a name that doesn't match the platform, don't release the crypto. Our explainer on Binance P2P escrow covers what the platform does and doesn't protect.
• If your account is blocked, ask the bank in writing for the reason and the steps to restore access, and keep the complaint number. Banks may not always be able to tell you everything, because anti-money-laundering rules limit what they can disclose. If a commercial bank does not resolve your complaint, the Banking Mohtasib can review it. That route does not cover microfinance banks.

This is reporting on a circular and a court order, not legal advice. If an investigation has been opened against you, speak to a lawyer.

What we're watching

• The first PVARA licence, and the first Client Money Account a bank opens under the circular.
• Whether the State Bank issues guidance on individual customers who trade crypto.
• Whether PVARA's rules eventually treat high-volume P2P merchants as service providers needing a licence.

Sources

• State Bank of Pakistan, BPRD Circular Letter No. 10 of 2026, "Authorizing Opening of Bank Accounts to PVARA's NOC/Licensed VASPs and their Customers", 14 April 2026.
• Lahore High Court, Hammad Ali and others v. The State and another, 2026 LHC 4849.
• PVARA, Licensing, read 15 October 2026.
• Banking Mohtasib Pakistan, online complaint conditions, read 15 October 2026.