The State Bank of Pakistan has notified all financial institutions in the country that the previous ban on providing services to cryptocurrency firms has been lifted. However, according to the new regulations, banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the recent introduction of the Virtual Assets Act of 2026, which establishes the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the industry. The central bank has replaced its 2018 ban with new rules, allowing regulated banks and financial institutions to open accounts for cryptocurrency companies that are licensed under the new act.
Under the new framework, banks can provide services to licensed virtual asset service providers, as well as those awaiting approval, provided they comply with strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Recently, the Pakistani government and Binance signed an agreement to explore the tokenization of up to $2 billion in bonds and commodity reserves.
Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.