The State Bank of Pakistan has officially lifted its ban on banks providing services to cryptocurrency firms, allowing them to open accounts for licensed virtual asset service providers. However, the new regulations stipulate that banks are not permitted to use their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This development follows the recent introduction of the 2026 Virtual Assets Act, which led to the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the industry.
The State Bank of Pakistan has replaced its 2018 ban with new guidelines that permit regulated banks and financial institutions to provide services to crypto companies approved by PVARA, including those seeking licenses, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined specific conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of transactions. In a recent move, the Pakistani government and Binance signed a memorandum of understanding to explore the tokenization of 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 introduce a national stablecoin.
According to the government, approximately 40 million people, or about 17% of Pakistan's population, are involved in crypto trading, making the country the third-largest crypto market by retail activity.