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

The State Bank of Pakistan has officially lifted its ban on providing services to crypto businesses, allowing banks to open accounts for licensed crypto companies. However, banks are still barred from using their own funds or customer deposits to invest in, trade, or hold crypto assets. This move follows the recent introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. Under the new framework, regulated banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank 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 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 retail crypto market, surpassing countries like Germany and Japan.