The State Bank of Pakistan has officially lifted its ban on banks providing services to cryptocurrency firms, notifying all financial institutions in the country of this 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 move follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector.
The central bank has replaced its 2018 ban with new rules allowing regulated banks to open accounts for crypto businesses licensed under the new act, provided they adhere to strict anti-money laundering and know-your-customer regulations. Banks can now offer services to virtual asset service providers and those seeking approval, under the condition that they comply with these regulations.
The State Bank of Pakistan outlined specific conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This development comes after the Pakistani government signed an agreement with Binance to explore tokenizing up to $2 billion in bonds and commodity reserves. Meanwhile, the chairman of Pakistan's Virtual Assets Regulatory Authority announced plans to accelerate crypto adoption and launch a national stablecoin, with approximately 40 million Pakistanis, or 17% of the population, already involved in crypto trading, making the country the third-largest crypto market by retail activity.