The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks to open accounts for crypto firms that have been approved by the Pakistan Virtual Asset Regulatory Authority (PVARA). However, the new regulations stipulate that banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets.
This development comes after the introduction of the Virtual Assets Act of 2026, which established PVARA to oversee and regulate the virtual asset sector in Pakistan. The State Bank of Pakistan has replaced its 2018 ban with new rules, permitting regulated financial institutions to provide services to virtual asset service providers (VASPs) that are licensed under the new act.
Under these new regulations, banks can offer services to VASPs, as well as to companies seeking approval, provided they comply with strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The State Bank of Pakistan has outlined specific conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of transactions. Recently, the Pakistani government and Binance signed a memorandum of understanding to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of PVARA announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. According to the government, approximately 40 million people, or about 17% of Pakistan's population, are involved in cryptocurrency trading, making the country the third-largest crypto market by retail activity.