The State Bank of Pakistan has officially lifted its seven-year ban on banks providing services to cryptocurrency businesses. However, financial institutions are still barred from using 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 established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector. The new rules allow licensed banks and financial institutions to open accounts for crypto firms that have been approved by PVARA, provided they adhere to 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 supervision. Recently, the Pakistani government signed an agreement with Binance to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of PVARA announced plans 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.