The State 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, the new regulations stipulate that banks are not allowed to invest in, trade, or hold cryptocurrency using their own funds or customer deposits. This development follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector.
The central bank has replaced its 2018 ban with new rules that enable regulated banks and financial institutions to open accounts for crypto firms licensed by PVARA. Under these new rules, banks can provide services to virtual asset service providers (VASPs) that are licensed under the new crypto act, as well as to those seeking approval, provided they adhere to strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations.
The State Bank of Pakistan has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. This move comes after the Pakistani government signed a memorandum of understanding with Binance in December, allowing the crypto exchange to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
The Chairman of PVARA has also announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin, with approximately 40 million Pakistanis, or 17% of the population, already involved in crypto trading, making the country the third-largest crypto market by retail activity.