The State Bank of Pakistan has officially lifted its seven-year ban on crypto services, notifying all banks and financial institutions that they are now permitted to provide services to cryptocurrency firms. However, the new regulations stipulate that banks are not allowed to invest in, trade, or hold cryptocurrencies using their own funds or customer deposits.
This move 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 State Bank of Pakistan has replaced its 2018 ban with new rules, allowing regulated banks and financial institutions to open accounts for crypto companies licensed by PVARA. Banks can now provide services to virtual asset service providers (VASPs) that are licensed under the new crypto act, as well as to those seeking approval, provided they comply with strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The central bank has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions.
This development comes after the Pakistani government and Binance signed a memorandum of understanding (MOU) in December to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. The Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) has also 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.