Pakistan Reverses Seven-Year Crypto Ban, Permitting Banks to Serve Crypto Firms

The State Bank of Pakistan has lifted its seven-year ban on banks providing services to cryptocurrency firms, allowing them to open accounts for licensed virtual asset service providers. 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 introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new rules permit regulated banks to provide services to licensed crypto firms, as well as those seeking approval, provided they comply with 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 supervision. This development comes after the Pakistani government signed an agreement with Binance to explore tokenizing bonds and commodities, 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.