The central bank of Pakistan has officially lifted its seven-year ban on banks providing services to cryptocurrency firms, allowing them to open accounts for licensed virtual asset service providers. However, banks are still restricted from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the recent introduction of the Virtual Assets Act 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector. Under the new framework, regulated banks can offer services to licensed virtual asset service providers and 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 crypto firms, including license verification, enhanced due diligence, and ongoing transaction supervision. This development comes after the Pakistani government signed an agreement with Binance to explore tokenization opportunities and announced plans to accelerate crypto adoption, leveraging Bitcoin mining and launching a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.