The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency firms, notifying all banks and financial institutions of the change. 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 follows the introduction of the 2026 Virtual Assets Act, which led to the establishment of the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector.
The new framework permits licensed banks and financial institutions to open accounts for crypto businesses that have been approved by PVARA, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. Banks can now provide services to virtual asset service providers (VASPs) that are licensed under the new crypto act, as well as to those awaiting approval, under the condition of strict regulatory compliance. The central bank has outlined detailed conditions for onboarding crypto 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 tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest crypto market by retail activity, surpassing countries like Germany and Japan.