The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, notifying all banks and financial institutions of the change. However, banks are still not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets, according to the new regulations.
This development follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector. The State Bank of Pakistan has replaced its 2018 ban with new guidelines that allow regulated banks and financial institutions to open accounts for crypto firms licensed by PVARA. Under these new rules, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they strictly comply with anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations.
The central bank has outlined detailed conditions for onboarding crypto companies, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. In a recent development, the Pakistani government and Binance signed a memorandum of understanding (MOU) to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA) has 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.