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 banking services to cryptocurrency businesses. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold digital assets. This move 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 rules allow banks to open accounts for crypto firms licensed by PVARA, as well as those seeking 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 crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. This development comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing up to $2 billion in bonds and commodity reserves. The country aims to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in crypto trading.