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 allowed to offer their services to these entities. However, the new regulations stipulate that banks are not permitted to invest in, trade, or hold cryptocurrency using their own funds or customer deposits. This development follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The central bank's new rules replace the 2018 ban on cryptocurrency and allow regulated banks 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 comply with 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 monitoring. Earlier, 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.
The Chairman of PVARA 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.