The central bank of Pakistan has officially lifted its seven-year ban on providing services to crypto businesses, allowing banks and financial institutions to open accounts for licensed crypto firms. However, these institutions are restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector.
Under the new framework, regulated banks can provide services to virtual asset service providers (VASPs) that are licensed or seeking approval under PVARA, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan outlined specific conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This development comes after the Pakistani government signed an agreement with Binance to explore tokenizing bonds and commodity reserves, and announced plans to promote crypto adoption, leverage Bitcoin mining, and introduce a national stablecoin.
With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.