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

The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks to offer their services to these firms. However, banks are still not allowed to invest in, trade, or hold cryptocurrencies using their own funds or customer deposits. This move comes after the enactment of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The new regulations permit licensed banks and financial institutions to open accounts for crypto firms that have been approved by PVARA. These banks can provide services to virtual asset service providers (VASPs) that are licensed under the new act, as well as to those seeking approval, provided they comply with strict anti-money laundering (AML), know-your-customer (KYC), 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 development follows a recent agreement between the Pakistani government and Binance to explore tokenization opportunities, as well as plans to accelerate crypto adoption, leverage Bitcoin mining, 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 cryptocurrency market.