The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, allowing banks and financial institutions to open accounts for companies licensed under the newly established Virtual Asset Regulatory Authority (PVARA). However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrencies.
This move follows the recent passage of the 2026 Virtual Assets Act, which created PVARA to oversee and regulate the virtual asset sector in Pakistan. The central bank has replaced its 2018 ban with new guidelines that enable regulated banks and financial institutions to provide services to virtual asset service providers (VASPs) that are licensed or seeking approval under PVARA, 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 cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing monitoring of transactions.
In a recent development, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the global cryptocurrency exchange to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves in Pakistan. Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and introduce a national stablecoin. According to the government, approximately 40 million people, or around 17% of the Pakistani population, are involved in cryptocurrency trading, making the country the third-largest retail crypto market, surpassing countries like Germany and Japan.