Pakistan Removes Seven-Year Crypto Ban, Permitting Banks to Offer Services to Crypto Firms

The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency companies, allowing banks to open accounts for crypto firms licensed under the newly established Virtual Asset Regulatory Authority. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency. This decision follows the recent enactment of the 2026 Virtual Assets Act, which regulates the sector. Under the new framework, banks can offer services to licensed virtual asset service providers, as well as those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This move is part of Pakistan's efforts to accelerate crypto adoption, with approximately 40 million people, or 17% of the population, already involved in crypto trading, making it the third-largest crypto market by retail activity.