The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, notifying all banks and financial institutions that they can open accounts for licensed virtual asset service providers. However, banks are still barred from using their own funds or customer deposits to invest in, trade, or hold crypto assets. This move follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. Under the new framework, regulated banks can provide services to licensed virtual asset service providers, as well as those seeking approval, as long as they comply with anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The central bank has outlined strict conditions for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction supervision. This development comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing up to $2 billion in bonds and commodities, 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.