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

The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency businesses, allowing banks and financial institutions to open accounts for licensed crypto firms. However, these institutions are restricted from using their own funds or customer deposits to invest in, trade, or hold digital assets. This move follows the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. Under the new framework, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined conditions for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction supervision. This development comes after Pakistan's government signed an agreement with Binance to explore tokenizing bonds and commodity reserves, 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 a significant market for digital assets.