The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, notifying all banks and financial institutions of the change. However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest, 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 State Bank of Pakistan has replaced its 2018 ban with new rules, enabling regulated banks and financial institutions to open accounts for cryptocurrency firms licensed by PVARA. Under the new framework, banks can provide services to virtual asset service providers (VASPs) that are licensed or seeking approval under the new crypto act, provided they comply with strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The central bank has outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Earlier, the Pakistani government and Binance signed a memorandum of understanding to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves. The Chairman of PVARA has also 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.