The State Bank of Pakistan has notified all financial institutions in the country that the long-standing ban on providing services to cryptocurrency companies has been lifted. However, the new regulations stipulate that banks are not allowed to invest in, trade, or hold digital assets using their own funds or customer deposits. This move follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector.
The central bank has replaced its 2018 ban with new guidelines that permit regulated banks to open accounts for crypto firms licensed under the new act. Banks can now offer services to licensed virtual asset service providers and those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan outlined the conditions for onboarding crypto firms, including mandatory 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 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.