The State Bank of Pakistan has officially lifted its ban on providing banking services to cryptocurrency firms, allowing banks to open accounts for licensed virtual asset service providers. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector.
Under the new framework, banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they comply with strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined detailed conditions for onboarding crypto firms, 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 tokenizing up to $2 billion in bonds and commodity reserves.
The country aims to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in crypto trading, making Pakistan the third-largest crypto market by retail activity.