The State Bank of Pakistan has officially lifted its ban on providing services to cryptocurrency companies, 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. This move follows the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the industry. The central bank has replaced its 2018 ban with new guidelines that enable licensed banks and financial institutions to open accounts for cryptocurrency firms approved 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 cryptocurrency act, provided they comply with 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 monitoring. Recently, the Pakistani government signed a memorandum of understanding (MOU) with Binance, allowing the exchange to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of PVARA has 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 cryptocurrency market, surpassing countries like Germany and Japan.