The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, notifying all banks and financial institutions that they are now allowed to offer services to these firms. However, the new regulations stipulate that banks are not permitted to invest, trade, or hold cryptocurrency using their own funds or customer deposits. This move comes after the recent enactment of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The central bank has replaced its 2018 ban with new rules that enable regulated banks and other financial institutions to open accounts for cryptocurrency companies approved by PVARA.
Under the new framework, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they strictly comply with anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Recently, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the exchange to explore tokenization opportunities in the country.
Additionally, the Chairman of PVARA 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 crypto market by retail activity, surpassing countries like Germany and Japan.