The State Bank of Pakistan has officially lifted its ban on providing banking services to cryptocurrency businesses, allowing banks to open accounts for crypto firms that have been approved under the newly established Virtual Asset Regulatory Authority (PVARA). While the ban has been lifted, banks are still not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This development follows the recent introduction of the 2026 Virtual Assets Act, which has paved the way for the regulation and supervision of the cryptocurrency sector in Pakistan.
Under the new regulatory framework, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined specific conditions for banks to onboard cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of transactions. In a recent development, the Pakistani government signed a memorandum of understanding (MOU) with Binance, the world's largest cryptocurrency exchange, to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves.
Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) has announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.