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

The State Bank of Pakistan has officially lifted its seven-year ban on providing banking services to cryptocurrency businesses, enabling banks to offer their services to these companies. However, the new regulations stipulate that banks are not permitted to invest in, trade, or hold cryptocurrencies using their own funds or customer deposits. This development follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector. The new framework allows licensed banks and financial institutions to open accounts for crypto firms that have been approved by PVARA, provided they adhere to stringent anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined specific conditions for onboarding crypto companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. This move is part of Pakistan's broader efforts to embrace cryptocurrency, with approximately 40 million citizens, or 17% of the population, already involved in crypto trading, making the country the third-largest retail crypto market globally.