The State Bank of Pakistan has officially lifted its seven-year ban on providing banking services to cryptocurrency companies, allowing financial institutions to open accounts for licensed crypto firms. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold crypto assets. This move comes after the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. Under the new regulations, banks can provide services to virtual asset service providers licensed by the authority, as well as those awaiting approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing rules.
The central bank has outlined detailed conditions for onboarding crypto companies, including mandatory license verification, enhanced due diligence, and ongoing supervision of transactions. This development follows a memorandum of understanding between the Pakistani government and Binance to explore tokenization opportunities, as well as plans to accelerate crypto adoption, leverage Bitcoin mining, and launch 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.