The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, notifying all banks and financial institutions that they are now allowed to offer services to these entities. However, the new rules stipulate that banks are not permitted to invest in, trade, or hold cryptocurrency using their own funds or customer deposits. This move follows the recent introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the sector.
The central bank has replaced its 2018 ban with new guidelines, enabling regulated banks and financial institutions to open accounts for cryptocurrency firms that have been approved by the authority. Under the new framework, banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, 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 supervision of transactions. This development comes after the Pakistani government and Binance signed a memorandum of understanding to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves.
Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority 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, already involved in cryptocurrency trading, making Pakistan the third-largest crypto market by retail activity.