The central bank of Pakistan has officially lifted its seven-year ban on providing banking services to cryptocurrency businesses. However, financial institutions are still restricted from using their own funds or customer deposits to invest in, trade, or hold digital assets.
This development comes after the introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new regulations permit licensed banks and financial institutions to open accounts for cryptocurrency firms that have been approved by the regulatory authority, provided they adhere to stringent anti-money laundering, know-your-customer, and counter-terrorism financing regulations. Banks can now offer services to licensed virtual asset service providers and those seeking approval, under the condition that they comply with the outlined requirements.
The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. Recently, the Pakistani government signed an agreement with Binance to explore the tokenization of government assets, and the country's regulatory authority has announced plans to accelerate cryptocurrency adoption and launch a national stablecoin.
With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is one of the largest retail crypto markets globally.