The State Bank of Pakistan has officially lifted its longstanding ban on providing services to cryptocurrency businesses, notifying all banks and financial institutions of the change. However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency. This development comes on the heels of the newly enacted 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 guidelines that enable regulated banks and financial institutions to open accounts for crypto companies licensed by PVARA. Under these new rules, banks can provide services to licensed virtual asset service providers (VASPs) and those awaiting approval, provided they adhere to stringent anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The State Bank of Pakistan has outlined specific conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and continuous transaction monitoring. Recently, the Pakistani government and Binance signed a memorandum of understanding to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
The Chairman of PVARA has also announced plans to accelerate crypto adoption, leverage Bitcoin mining, and introduce a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan represents a significant market, ranking third in retail activity worldwide, surpassing countries like Germany and Japan.