The State Bank of Pakistan has officially lifted its ban on providing banking services to cryptocurrency businesses, allowing financial institutions to open accounts for licensed virtual asset service providers. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector.
Under the new regulations, banks can provide services to licensed 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 detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring.
This development comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing up to $2 billion in bonds and commodity reserves. The country aims to accelerate cryptocurrency adoption, with approximately 40 million people, or 17% of the population, already involved in crypto trading, making it the third-largest retail crypto market.