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

The central bank of Pakistan has officially lifted its seven-year ban on providing banking services to cryptocurrency firms. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold digital assets. This move follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new rules allow banks to open accounts for licensed cryptocurrency companies and those seeking approval, provided they adhere to strict anti-money laundering and know-your-customer regulations. The State Bank of Pakistan outlined conditions for onboarding cryptocurrency firms, including license verification, enhanced due diligence, and ongoing transaction monitoring. This development 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 plans to launch a national stablecoin, with approximately 40 million of its citizens already involved in cryptocurrency trading.