The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, notifying all banks and financial institutions that they are allowed to open accounts for crypto companies licensed by the Pakistan Virtual Asset Regulatory Authority (PVARA). However, the new regulations stipulate that banks are not permitted to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This development follows the recent passage of the 2026 Virtual Assets Act, which established PVARA to oversee and regulate the virtual asset sector in Pakistan.
The central bank has replaced its 2018 ban with new rules, enabling regulated banks and financial institutions to provide services to virtual asset service providers (VASPs) that are licensed under the new act, as well as to those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. According to the State Bank of Pakistan, "Subject to strict compliance with the conditions outlined, SBP Regulated Entities (REs) may open bank accounts for entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs)." The central bank's regulations also outline detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions. In a recent development, the Pakistani government and Binance signed a memorandum of understanding (MOU) to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin.
Approximately 40 million people, or around 17% of Pakistan's population, are involved in cryptocurrency trading, making the country the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.