The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, issuing a notification to all banks and financial institutions in the country. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This move comes after the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The new rules allow regulated banks to open accounts for cryptocurrency firms licensed by PVARA, 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 specific conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This development follows a memorandum of understanding between the Pakistani government and Binance to explore tokenization opportunities, as well as plans to accelerate cryptocurrency adoption and launch a national stablecoin.
With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest retail cryptocurrency market, surpassing countries like Germany and Japan.