The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency businesses, notifying all banks and financial institutions of the change. However, the new rules stipulate that banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This development follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector.
The central bank's new framework allows regulated banks to open accounts for crypto firms licensed by PVARA, as well as those awaiting approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan outlined the conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This move comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing up to $2 billion in bonds and commodities. Additionally, the Chairman of PVARA announced plans to accelerate crypto adoption, leverage Bitcoin mining, and introduce a national stablecoin, with approximately 40 million Pakistanis, or 17% of the population, already involved in crypto trading, making the country the third-largest retail crypto market.