Pakistan Reverses Seven-Year Crypto Ban, Permitting Banks to Offer Services to Crypto Providers

The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, informing all banks and financial institutions in the country of the change. However, under the new regulations, banks are restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This development follows the recent introduction 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 crypto firms that have been approved under the Act, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. Banks can now offer services to licensed virtual asset service providers and those awaiting approval, subject to rigorous verification and ongoing supervision. In a significant move, the State Bank of Pakistan has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and continuous monitoring of transactions. This shift in policy comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenization opportunities and amid plans to accelerate crypto adoption and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is a significant player in the global crypto market.