The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks and financial institutions to open accounts for licensed crypto firms. However, these institutions are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency. 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. Under the new rules, banks can provide services to virtual asset service providers (VASPs) that are licensed or seeking approval under PVARA, provided they comply with anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The central bank has outlined strict conditions for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction monitoring. This development comes after the Pakistani government signed an agreement with Binance to explore tokenizing up to $2 billion in bonds and commodity reserves, and announced plans to accelerate crypto adoption and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.