Pakistan Ends Seven-Year Cryptocurrency Ban, Permitting Banks to Support Crypto Businesses

The State Bank of Pakistan has officially lifted its ban on banks providing services to cryptocurrency firms, a move that comes after the introduction of the 2026 Virtual Assets Act. This new legislation established the Pakistan Virtual Asset Regulatory Authority, which oversees and regulates the sector. As a result, banks can now open accounts for approved crypto businesses, but they are not allowed to use their own funds or customer deposits to invest in or trade cryptocurrencies. The new rules require strict adherence to anti-money laundering and know-your-customer regulations. Banks are permitted to provide services to virtual asset service providers that have been licensed under the new act, as well as to those awaiting approval. The central bank has outlined specific conditions for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction monitoring. Recently, the Pakistani government and Binance signed an agreement to explore tokenizing bonds and commodity reserves. The country aims to increase cryptocurrency adoption and plans to launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in crypto trading.