The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency businesses, informing all banks and financial institutions that they are now allowed to offer services to these firms. 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 move follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The central bank has replaced its 2018 ban with new rules that enable regulated banks and other financial institutions to open accounts for cryptocurrency companies licensed by PVARA.
Under the new framework, banks can provide services to virtual asset service providers (VASPs) that are licensed under the new cryptocurrency act, as well as to those seeking approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions. Recently, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the cryptocurrency exchange to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. Approximately 40 million people, or 17% of Pakistan's population, are involved in cryptocurrency trading, making the country the third-largest crypto market by retail activity.