Pakistan Reverses Seven-Year Crypto Ban, Permitting Banks to Support Digital Asset Providers

The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, allowing banks and financial institutions to open accounts for these companies. However, these institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold digital assets. This move comes after the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new rules permit regulated banks to provide services to licensed virtual asset service providers, as well as those awaiting approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. This development follows a memorandum of understanding between the Pakistani government and Binance to explore tokenizing up to $2 billion in bonds and commodity reserves. Additionally, Pakistan's Virtual Assets Regulatory Authority has announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in cryptocurrency trading.