The State Bank of Pakistan has officially notified all banks and financial institutions that the longstanding ban on providing services to cryptocurrency companies has been lifted. However, the new regulations stipulate that banks are not allowed to invest in, trade, or hold cryptocurrency using their own funds or customer deposits. This move follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the industry. The central bank has replaced its 2018 ban with new rules, allowing regulated banks to open accounts for cryptocurrency firms that have been approved by the regulatory authority.
Under the new framework, banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring.
This development comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenization opportunities and follows announcements of plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is considered the third-largest crypto market by retail activity.