Pakistan Removes Seven-Year Crypto Ban, Enables Banks to Support Digital Asset Providers

The State Bank of Pakistan has lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks to open accounts for licensed crypto firms. However, financial institutions are still barred from investing in or trading cryptocurrencies using their own funds or customer deposits. This move follows the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. Under the new rules, banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they comply with strict anti-money laundering and know-your-customer regulations. The central bank has outlined detailed conditions for onboarding crypto firms, including mandatory license verification and ongoing transaction supervision. This development comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing bonds and commodity reserves, and announced plans to accelerate crypto adoption and launch a national stablecoin. With around 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest crypto market by retail activity.