The State Bank of Pakistan has officially notified all banks and financial institutions that the longstanding ban on providing services to cryptocurrency companies has been lifted. However, according to new regulations, banks are strictly forbidden from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This development follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector.
The central bank has replaced its 2018 ban with new guidelines, allowing regulated banks and financial institutions to open accounts for cryptocurrency firms that have been approved by PVARA. Under the new framework, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking 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 cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. Recently, the Pakistani government and Binance signed a memorandum of understanding (MOU) 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 cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.