The State Bank of Pakistan has officially notified all financial institutions that the long-standing ban on providing services to crypto businesses has been revoked. 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 comes after the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector.
The central bank has replaced its 2018 ban with new guidelines, enabling regulated banks to open accounts for crypto firms approved by PVARA. Under these new rules, banks can provide services to licensed virtual asset service providers (VASPs) 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 outlined the conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of transactions. Recently, the Pakistani government signed an agreement with Binance to explore tokenizing up to $2 billion in bonds and commodity reserves.
Additionally, the Chairman of PVARA announced plans to accelerate crypto adoption 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.