The central bank of Pakistan 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 development follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the sector. The new rules allow licensed banks and financial institutions to open accounts for cryptocurrency firms that have been approved by the regulatory authority, 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 cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. This move comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenization opportunities and amid 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 the third-largest retail crypto market, surpassing countries like Germany and Japan.