The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks and financial institutions to open accounts for crypto firms licensed under the new Virtual Assets Act. However, banks are still barred from using their own funds or customer deposits to invest in, trade, or hold digital assets.
The new rules follow the establishment of the Pakistan Virtual Asset Regulatory Authority, which will oversee the sector. Banks can now provide services to licensed virtual asset service providers, as well as those seeking approval, provided they comply with strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined detailed conditions for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction monitoring.
This development comes after the Pakistani government signed an agreement with Binance to explore tokenization opportunities and announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin. With around 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest crypto market by retail activity.