The State Bank of Pakistan has officially lifted its ban on providing banking services to cryptocurrency firms, notifying all financial institutions in the country of this change. However, the new regulations stipulate that banks are not permitted to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency. This development follows the introduction of the 2026 Virtual Assets Act, which led to the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector. The State Bank of Pakistan has replaced its 2018 ban with new guidelines that enable regulated banks and financial institutions to open accounts for cryptocurrency companies licensed by PVARA.
Banks can now provide services to virtual asset service providers (VASPs) that are either licensed or seeking approval under the new act, provided they adhere strictly to anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The central bank has outlined specific conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and continuous supervision of transactions. Earlier, the Pakistani government and Binance signed an agreement to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
The Chairman of PVARA also announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and introduce a national stablecoin. Approximately 40 million people, or about 17% of Pakistan's population, are involved in cryptocurrency trading, making the country the third-largest crypto market by retail activity.