The central bank of Pakistan has officially lifted its ban on providing services to cryptocurrency companies, notifying all banks and financial institutions of the policy 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 crypto assets. 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 State Bank of Pakistan has replaced its 2018 ban with new rules allowing regulated financial institutions to open accounts for crypto firms licensed under the new act, provided they comply with anti-money laundering and know-your-customer regulations. Banks can now provide services to licensed virtual asset service providers and those seeking approval, under strict conditions.
The central bank has outlined detailed requirements for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction monitoring. This development comes after the Pakistani government signed an agreement with Binance to explore tokenizing bonds and commodity reserves, and announced plans to accelerate crypto adoption and launch a national stablecoin. With around 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.