The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, notifying all banks and financial institutions of the change. While the ban has been lifted, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency. This development follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the industry.
The new rules allow regulated banks and financial institutions to open accounts for cryptocurrency companies that have been approved by PVARA. Banks can provide services to licensed virtual asset service providers (VASPs) and 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 stated that, subject to certain conditions, its regulated entities may open bank accounts for PVARA-licensed VASPs. The central bank has also outlined detailed requirements for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring.
In a recent development, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the 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 announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin.
According to the government, approximately 40 million people, or 17% of the Pakistani population, are involved in cryptocurrency trading, making the country the third-largest crypto market by retail activity.