The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency companies, allowing banks and financial institutions to open accounts for crypto firms that have been approved by the Pakistan Virtual Asset Regulatory Authority (PVARA). However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets, as per the new regulations. This move follows the recent passage of the 2026 Virtual Assets Act, which established PVARA to oversee and regulate the virtual asset sector in Pakistan. The new rules permit regulated banks and financial institutions to provide services to virtual asset service providers (VASPs) that are licensed under the act, as well as to those seeking approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations.
The State Bank of Pakistan has outlined specific conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. 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. Additionally, the Chairman of PVARA, Bilal Bin Saqib, has announced plans to accelerate crypto adoption in Pakistan, leveraging Bitcoin mining, and launching a national stablecoin. According to the government, approximately 40 million people, or around 17% of the Pakistani population, are involved in cryptocurrency trading, making it the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.