The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, allowing banks to open accounts for companies licensed under the newly enacted Virtual Assets Act. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. The new regulations enable banks to provide services to licensed virtual asset service providers, as well as those awaiting approval, provided they adhere to stringent anti-money laundering and know-your-customer regulations.
The move follows the establishment of the Pakistan Virtual Asset Regulatory Authority, which will oversee the sector. Banks are required to verify licenses, conduct enhanced due diligence, and monitor transactions to ensure compliance. This development comes after the Pakistani government signed an agreement with Binance to explore tokenization opportunities and announced plans to promote crypto adoption, including Bitcoin mining and a national stablecoin.
With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is now the third-largest crypto market by retail activity.