The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, allowing banks and financial institutions to open accounts for licensed crypto companies. However, these institutions are strictly prohibited from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This move follows the recent implementation of the Virtual Assets Act of 2026, 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 and those seeking approval, provided they adhere to stringent anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and continuous transaction monitoring. This development comes after the Pakistani government and Binance signed an agreement to explore tokenizing bonds, treasury bills, and commodity reserves worth up to $2 billion. Additionally, the government has announced plans to accelerate crypto adoption, leverage Bitcoin mining, and introduce a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in crypto trading, making Pakistan the third-largest retail crypto market.