The central bank of Pakistan has officially notified all financial institutions in the country that the long-standing ban on providing services to cryptocurrency companies has been lifted. However, under the new regulations, banks are strictly prohibited from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This move by the State Bank of Pakistan follows the recent implementation of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the industry. The new rules, which replace the 2018 ban on cryptocurrency, allow regulated banks and financial institutions to open accounts for cryptocurrency firms that have been approved or are seeking approval under PVARA, provided they adhere to stringent anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The State Bank of Pakistan has outlined specific conditions for banks to onboard cryptocurrency companies, including mandatory license verification, enhanced due diligence, and continuous transaction monitoring. Earlier, in December, the Pakistani government and Binance signed a memorandum of understanding to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves. The Chairman of PVARA also announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and introduce a national stablecoin. With approximately 40 million people, or about 17% of the population, involved in cryptocurrency trading, Pakistan represents the third-largest retail crypto market, surpassing countries like Germany and Japan.