Pakistan Removes Seven-Year Ban on Banks Serving Crypto Firms

The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, allowing banks to offer their services to these companies. However, the new regulations stipulate that banks are not permitted to invest in, trade, or hold cryptocurrencies using their own funds or customer deposits. This move follows the introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the sector. The central bank has replaced its 2018 ban with new rules that enable regulated banks to open accounts for cryptocurrency companies licensed by the regulatory authority. Under the new framework, banks can provide services to licensed virtual asset service providers and those seeking approval, provided they adhere to 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 signed an agreement with Binance to explore tokenization opportunities, and the country's regulatory authority has announced plans to accelerate cryptocurrency 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 cryptocurrency market.