The State Bank of Pakistan has notified all financial institutions in the country that the longstanding ban on providing services to cryptocurrency firms has been lifted. However, according to new regulations, banks are restricted from using their own funds or customer deposits to invest in, trade, or hold digital assets.
This development follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The central bank has replaced its 2018 ban with new guidelines that allow regulated banks to open accounts for crypto companies licensed by the regulatory authority. Under the new framework, banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, 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. Recently, the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
The Chairman of Pakistan's Virtual Assets Regulatory Authority has also announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin. Approximately 40 million people, or 17% of the Pakistani population, are involved in crypto trading, making the country the third-largest retail crypto market, surpassing Germany and Japan.