The State Bank of Pakistan has officially lifted its ban on banks providing services to cryptocurrency companies, allowing them to open accounts for firms licensed under the newly enacted Virtual Assets Act. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency. The new regulations enable banks to provide services to licensed virtual asset service providers, as well as those awaiting approval, provided they adhere to stringent anti-money laundering and know-your-customer regulations.
The move follows the establishment of the Pakistan Virtual Asset Regulatory Authority, which will oversee the sector. The central bank has outlined specific conditions for onboarding cryptocurrency firms, including mandatory license verification and enhanced due diligence.
This development comes after the Pakistani government signed an agreement with Binance to explore tokenizing bonds and commodity reserves, and announced plans to accelerate cryptocurrency adoption and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is now the third-largest crypto market by retail activity.