The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency businesses, allowing banks and financial institutions to open accounts for crypto firms that have been approved by the Pakistan Virtual Asset Regulatory Authority (PVARA). However, under the new regulations, banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This move follows the recent passage of the Virtual Assets Act of 2026, which established PVARA to oversee and regulate the virtual asset sector in Pakistan.
The new rules, which replace the 2018 ban on cryptocurrency, enable regulated banks and financial institutions to provide services to virtual asset service providers (VASPs) that are licensed under the new act, as well as to those awaiting approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. According to the State Bank of Pakistan, 'Subject to strict compliance with the outlined conditions, SBP Regulated Entities (REs) are permitted to open bank accounts for entities that have been licensed by PVARA as Virtual Asset Service Providers (VASPs).' The central bank has also outlined detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions.
In a recent development, the Pakistani government and Binance signed a memorandum of understanding (MOU) to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin.
With approximately 40 million people, or around 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.