The State 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 crypto firms that have been approved by the Pakistan Virtual Asset Regulatory Authority (PVARA). However, under the new regulations, banks are still barred from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This development follows the recent passage of the 2026 Virtual Assets Act, which established PVARA as the regulatory body overseeing the virtual asset sector in Pakistan.
The new framework enables regulated banks and financial institutions to provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they adhere strictly to anti-money laundering, know-your-customer, and counter-terrorism financing regulations. According to the State Bank of Pakistan, 'Subject to strict compliance with the outlined conditions, SBP Regulated Entities (REs) may open bank accounts for entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs).' The central bank has also outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and continuous supervision of all transactions.
In a recent development, the Pakistani government signed a memorandum of understanding with Binance, the world's largest cryptocurrency exchange, to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority, Bilal Bin Saqib, announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or around 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.