In a significant move, the State Bank of Pakistan has announced the lifting of its seven-year ban on providing services to cryptocurrency businesses. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold crypto assets. This development follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector.
The new rules allow licensed banks and financial institutions to open accounts for crypto firms approved by PVARA, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. Additionally, the central bank has outlined detailed conditions for onboarding crypto companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. Pakistan's government has expressed interest in advancing crypto adoption, with plans to explore tokenization and launch a national stablecoin.
Approximately 40 million people in Pakistan, or around 17% of the population, are involved in crypto trading, making it the third-largest retail crypto market worldwide.