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

The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, allowing banks and financial institutions to offer services to licensed crypto businesses. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the enactment of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new rules permit regulated banks to open accounts for licensed crypto firms and those seeking approval, provided they comply with anti-money laundering and know-your-customer regulations. The central bank has outlined strict conditions for onboarding crypto firms, including license verification and enhanced due diligence. This development comes after the Pakistani government signed an agreement with Binance to explore tokenization and announced plans to promote crypto adoption and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is a significant player in the global crypto market.