Pakistan's central banking authority has officially lifted its seven-year prohibition on providing banking services to cryptocurrency businesses. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold digital assets.
This decision comes after the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. The new rules allow regulated banks to open accounts for cryptocurrency firms that have been approved or are seeking approval under the Virtual Assets Act, provided they comply with strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring.
This development follows a memorandum of understanding between the Pakistani government and the world's largest cryptocurrency exchange, which aims to explore the tokenization of various assets. The country's regulatory authority has also announced plans to accelerate cryptocurrency adoption and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in cryptocurrency trading.