The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks and financial institutions to open accounts for licensed crypto firms. However, these institutions are not allowed to use their own funds or customer deposits to invest in, trade, or hold digital assets. This development follows the recent enactment of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. As a result, regulated banks can now provide services to licensed virtual asset service providers, as well as those awaiting approval, provided they adhere to strict 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 license verification, enhanced due diligence, and ongoing transaction supervision. This move comes after the Pakistani government signed a memorandum of understanding with Binance to explore the tokenization of various assets and the country's plans to accelerate crypto adoption, leveraging Bitcoin mining and launching a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.