In a significant move, Pakistan's central bank has officially lifted its seven-year ban on providing services to cryptocurrency firms. However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold digital assets.
This development follows the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector. The State Bank of Pakistan has introduced new rules that enable regulated banks and financial institutions to open accounts for cryptocurrency companies licensed under PVARA. These banks can provide services to virtual asset service providers (VASPs) that have been approved under the new crypto act, as well as those awaiting approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The central bank has outlined specific conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and continuous supervision of all transactions.
Recently, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the global cryptocurrency exchange to explore tokenization opportunities in the country. Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and introduce a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan represents the third-largest retail crypto market, surpassing countries like Germany and Japan.