The State Bank of Pakistan has officially notified all banks and financial institutions that the longstanding ban on providing services to cryptocurrency firms has been lifted. However, banks are still barred from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency 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 industry. The central bank has replaced its 2018 ban with new regulations that allow licensed banks and financial institutions to open accounts for cryptocurrency companies approved by PVARA.
Under the new framework, banks can provide services to virtual asset service providers (VASPs) that are licensed under the new cryptocurrency law, as well as to 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 onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions.
Recently, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the company to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of PVARA 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.