The central bank of Pakistan has officially lifted its seven-year prohibition on providing services to cryptocurrency companies, notifying all banking and financial institutions of the change. However, the new regulations stipulate that banks are not allowed to use their own funds or those of their customers to invest in, trade, or hold cryptocurrency assets.
This development follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the sector. The State Bank of Pakistan has replaced its 2018 ban with new guidelines, enabling regulated financial institutions to open accounts for cryptocurrency firms that have been approved by the regulatory authority.
Under the new framework, banks can provide 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 cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. This move comes after the Pakistani government signed a memorandum of understanding with Binance, the world's largest cryptocurrency exchange, to explore the tokenization of government assets.
The country's regulatory authority has also announced plans to accelerate cryptocurrency adoption and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in cryptocurrency trading.