The central bank of Pakistan has announced the lifting of a seven-year ban on banks providing services to cryptocurrency businesses. However, financial institutions are still barred from using their funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector.
The new rules allow regulated banks to open accounts for crypto firms licensed by the authority, provided they adhere to strict anti-money laundering and know-your-customer regulations. Banks can now provide services to licensed virtual asset service providers and those seeking approval, under the condition of strict compliance with regulatory requirements.
The central bank has outlined detailed 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 tokenization opportunities and announced plans to accelerate crypto adoption and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is a significant market for digital assets.