The State Bank of Pakistan has officially lifted its longstanding ban on providing services to cryptocurrency businesses, permitting banks and financial institutions to open accounts for crypto firms that have been licensed by the Pakistan Virtual Asset Regulatory Authority (PVARA). While the new rules allow banks to provide services to virtual asset service providers (VASPs), they explicitly prohibit these institutions from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This development follows the recent passage of the 2026 Virtual Assets Act, which established PVARA to oversee and regulate the virtual asset sector in Pakistan.
The State Bank of Pakistan has replaced its 2018 ban with a new framework that enables regulated banks and financial institutions to offer services to crypto companies approved by PVARA, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. According to the central bank, "Subject to strict compliance with the outlined conditions, State Bank of Pakistan Regulated Entities (REs) are permitted to open bank accounts for entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs)." The rules also outline detailed requirements for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. In a recent development, the Pakistani government and Binance signed a memorandum of understanding to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority 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 crypto market by retail activity.