Pakistan Reverses Seven-Year Crypto Ban, Permitting Banks to Offer Services to Crypto Providers

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 investing in, trading, or holding digital assets using their own funds or customer deposits. This move follows the introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new regulations allow licensed banks and financial institutions to open accounts for crypto firms approved by the regulatory authority, provided they adhere to strict anti-money laundering and know-your-customer regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding crypto companies, including mandatory license verification and enhanced due diligence. This development comes after the Pakistani government signed an agreement with Binance to explore tokenization opportunities and announced plans to accelerate crypto adoption and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is now the third-largest retail crypto market, surpassing countries like Germany and Japan.