The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, notifying all banks and financial institutions that they are now permitted to do so. However, under the new regulations, banks are strictly forbidden from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency.
This move 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 rules allowing regulated banks and financial institutions to open accounts for crypto firms licensed by PVARA.
These banks can provide services to virtual asset service providers (VASPs) that are either licensed or seeking approval under the new crypto act, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan outlined that, 'subject to strict compliance with the outlined conditions, regulated entities may open bank accounts for entities licensed by PVARA as Virtual Asset Service Providers.' The central bank has also outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. In a recent development, the Pakistani government and Binance signed a memorandum of understanding to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves. Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority 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 crypto trading, Pakistan is the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.