The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, notifying all banking and financial institutions that they are allowed to offer their services to these entities. However, the new regulations stipulate that banks are not permitted to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This development follows the introduction of the 2026 Virtual Assets Act, which establishes the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the digital asset sector.
The central bank has replaced its 2018 ban with new guidelines, enabling regulated banks and financial institutions to open accounts for cryptocurrency companies licensed by PVARA. Under these new rules, banks can provide services to virtual asset service providers (VASPs) that are licensed or seeking approval under the new crypto act, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan has outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Recently, the Pakistani government signed a memorandum of understanding with Binance, allowing the global cryptocurrency exchange 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 cryptocurrency adoption, leverage Bitcoin mining, 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.