The central bank of Pakistan has officially lifted its seven-year prohibition on providing services to cryptocurrency businesses, notifying all banks and financial institutions of the change. However, the new regulations stipulate that banks are not allowed to use 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 to oversee the sector.
The State Bank of Pakistan has replaced its 2018 ban with new guidelines, enabling regulated banks to open accounts for cryptocurrency companies licensed under the new act. These banks can provide services to virtual asset service providers, as well as those awaiting approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The central bank has outlined specific conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Recently, the Pakistani government signed a memorandum of understanding with Binance, allowing the exchange to explore tokenizing up to $2 billion in bonds 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. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.