The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, notifying all banks and financial institutions that they are now allowed to offer services to these firms. However, the new regulations stipulate that banks are not permitted to invest in, trade, or hold cryptocurrency using their own funds or customer deposits. This move comes after the recent introduction of the 2026 Virtual Assets Act, which led to the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector.
According to the new rules, regulated banks and other financial institutions can open accounts for cryptocurrency firms that have been approved by PVARA. These banks can provide services to licensed virtual asset service providers (VASPs), as well as to those seeking approval, provided they adhere strictly to anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This development follows a recent agreement between the Pakistani government and Binance 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 has announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and introduce a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.