The State Bank of Pakistan has officially lifted its ban on providing services to crypto companies, notifying all banks and financial institutions of the change. However, the new regulations dictate that banks are not allowed to invest in, trade, or hold crypto assets using their own funds or customer deposits. This development follows the enactment of the 2026 Virtual Assets Act, which led to the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector.
The central bank has replaced its 2018 crypto ban with new rules, enabling regulated banks and financial institutions to open accounts for crypto firms approved by PVARA. Under these new guidelines, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Recently, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the crypto exchange to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority announced 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 crypto market by retail activity, surpassing countries like Germany and Japan.