Pakistan Reverses Seven-Year Crypto Ban, Permitting Banks to Support Digital Asset Providers

The central bank of Pakistan has officially lifted its seven-year prohibition on providing services to cryptocurrency companies. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold digital assets. This development follows the enactment of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new rules allow regulated banks to open accounts for licensed cryptocurrency firms and those seeking approval, provided they adhere to stringent anti-money laundering and know-your-customer regulations. Banks can now offer services to virtual asset service providers, subject to strict compliance with regulatory requirements. The central bank has outlined detailed conditions for onboarding cryptocurrency companies, including mandatory license verification and enhanced due diligence. This move comes after the Pakistani government signed an agreement with Binance to explore tokenizing bonds and commodity reserves. The country aims to accelerate cryptocurrency adoption and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in cryptocurrency trading.