The State Bank of Pakistan has officially lifted its 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, banks are still not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the introduction of the Virtual Assets Act of 2026, which created PVARA to oversee and regulate the virtual asset sector in Pakistan. The new rules permit regulated banks and financial institutions to provide services to licensed virtual asset service providers (VASPs) and those seeking approval, as long as they comply with anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
Banks must verify the licenses of crypto firms, conduct enhanced due diligence, and supervise all their transactions. In a recent development, the Pakistani government and Binance signed an agreement to explore the tokenization of government assets worth up to $2 billion. The Chairman of PVARA has also announced plans to accelerate crypto adoption, promote Bitcoin mining, and launch a national stablecoin in Pakistan.
Approximately 17% of Pakistan's population, or around 40 million people, are involved in cryptocurrency trading, making it the third-largest retail crypto market, surpassing countries like Germany and Japan.