The State Bank of Pakistan has officially lifted its seven-year ban on providing banking services to cryptocurrency firms, enabling banks to open accounts for crypto companies that have been approved or are seeking approval under the newly established 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 cryptocurrencies. This development comes after the introduction of the 2026 Virtual Assets Act, which has paved the way for the creation of PVARA to oversee and regulate the virtual asset sector in Pakistan.
Under the new framework, banks can provide services to licensed virtual asset service providers (VASPs) and those awaiting approval, provided they adhere strictly to 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 continuous monitoring of transactions. In a recent agreement, the Pakistani government and Binance, the world's largest cryptocurrency exchange, signed a memorandum of understanding to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) has announced plans to accelerate crypto adoption, promote Bitcoin mining, and introduce a national stablecoin.
With approximately 40 million people, or around 17% of the population, involved in cryptocurrency trading, Pakistan has become the third-largest crypto market in terms of retail activity, surpassing countries like Germany and Japan.