In a recent development, the State Bank of Pakistan has lifted its seven-year ban on providing services to cryptocurrency firms. However, the new regulations stipulate that banks are prohibited from investing, trading, or holding digital assets using their own funds or customer deposits. This move comes after the enactment of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The central bank has replaced its 2018 ban with new rules, allowing regulated banks and financial institutions to open accounts for crypto companies licensed under PVARA.
Banks can now provide services to virtual asset service providers (VASPs) and those seeking approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), 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 supervision.
This development follows a memorandum of understanding (MOU) between the Pakistani government and Binance to explore tokenization opportunities. The country is poised to accelerate crypto adoption, with approximately 40 million people, or 17% of the population, already involved in digital asset trading.