Pakistan Removes Seven-Year Restriction, Enabling Banks to Support Crypto Providers

The State Bank of Pakistan has notified all banks and financial institutions that the ban on providing services to cryptocurrency companies has been lifted. However, banks are still prohibited from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies, according to new regulations. This move follows the recent introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The central bank has replaced its 2018 ban on cryptocurrencies with new rules that allow regulated banks and financial institutions to open accounts for cryptocurrency companies licensed by the authority. Under the new framework, banks can provide services to licensed virtual asset service providers and those seeking approval, provided they comply with anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined strict conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This development comes after the Pakistani government and Binance signed a memorandum of understanding to explore tokenization opportunities. The country's regulatory authority has also announced plans to accelerate cryptocurrency adoption and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in cryptocurrency trading.