The central bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency companies, allowing banks to open accounts for crypto firms licensed under the newly enacted Virtual Assets Act. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold crypto assets.
The new rules, which replace the 2018 ban, enable regulated banks to provide services to virtual asset service providers, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The move follows the establishment of the Pakistan Virtual Asset Regulatory Authority, which is responsible for licensing and overseeing the sector. Banks are now permitted to open accounts for crypto firms approved by the regulatory authority, subject to thorough verification, due diligence, and ongoing supervision. This development comes after the government of Pakistan signed an agreement with Binance to explore tokenization opportunities and announced plans to accelerate crypto adoption, including the launch of 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.