The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency businesses, notifying all banks and financial institutions of the change. However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This move follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The State Bank of Pakistan has replaced its 2018 ban with new rules allowing regulated banks to open accounts for crypto firms licensed under PVARA.
Under these new rules, banks can provide services to virtual asset service providers (VASPs) that are licensed or seeking approval under the new crypto act, provided they adhere strictly to 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.
Recently, the Pakistani government signed an agreement with Binance to explore tokenizing up to $2 billion in bonds and commodity reserves. Pakistan's Virtual Assets Regulatory Authority has also announced plans to accelerate crypto adoption and launch a national stablecoin. With approximately 40 million people, or about 17% of the population, involved in crypto trading, Pakistan is the third-largest crypto market by retail activity.