The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency businesses, notifying all financial institutions that they are permitted to open accounts for crypto firms licensed by the Pakistan Virtual Asset Regulatory Authority (PVARA). While banks are now allowed to facilitate transactions for virtual asset service providers (VASPs), they are strictly prohibited from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies.
This development follows the recent passage of the 2026 Virtual Assets Act, establishing PVARA as the regulatory body overseeing the sector. Under the new framework, banks can provide services to licensed VASPs and those awaiting approval, provided they adhere to stringent anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations.
The State Bank of Pakistan has outlined specific conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and continuous transaction monitoring. In a recent move, the Pakistani government and Binance signed a memorandum of understanding (MOU) to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Pakistan's Virtual Assets Regulatory Authority Chairman, Bilal Bin Saqib, has also announced plans to accelerate 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.