The State Bank of Pakistan has notified all banking and financial institutions that the ban on providing services to cryptocurrency companies has been lifted. However, according to the new regulations, banks are prohibited from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This decision follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the industry. The central bank has replaced its 2018 ban on cryptocurrency with new rules allowing regulated banks and financial institutions to open accounts for crypto companies licensed by PVARA.
Under the new framework, banks can provide services to virtual asset service providers (VASPs) licensed under the new cryptocurrency law, as well as to those seeking approval, provided they strictly comply with anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan stated that, subject to strict compliance with the outlined conditions, regulated entities may open bank accounts for entities licensed by PVARA as VASPs. The central bank's rules also outline detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions. In December, the Pakistani government and Binance signed a memorandum of understanding (MOU) to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves.
The same month, the Chairman of Pakistan's Virtual Assets Regulatory Authority announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. Approximately 40 million people, or 17% of Pakistan's population, are involved in cryptocurrency trading, according to the government.