The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, notifying all banks and financial institutions that they are now permitted to do so. However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest, trade, or hold cryptocurrency. This development follows the recent introduction 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 rules, enabling regulated banks and financial institutions to open accounts for crypto firms 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 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. This move comes after the Pakistani government and Binance signed a memorandum of understanding (MOU) in December to explore tokenization opportunities.
The country is reportedly home to a significant crypto market, with around 40 million people, or 17% of the population, involved in cryptocurrency trading.