The State Bank of Pakistan has notified all banks and financial institutions that the long-standing ban on providing services to crypto companies has been lifted. However, under the new regulations, banks are restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency. This development comes after the introduction 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, allowing regulated banks to open accounts for crypto firms licensed by PVARA. Banks can now provide services to virtual asset service providers (VASPs) and those seeking approval, provided they comply with strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined 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 tokenization opportunities, and the Chairman of PVARA announced plans to accelerate crypto adoption and launch a national stablecoin.
With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest crypto market by retail activity.