The central bank of Pakistan has officially lifted its seven-year ban on providing financial services to cryptocurrency businesses. However, according to new regulations, banks are restricted from using their own funds or customer deposits to invest in, trade, or hold digital assets. This decision follows the recent passage of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the sector. The new rules allow licensed banks and financial institutions to open accounts for crypto firms approved by the regulatory authority, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The State Bank of Pakistan outlined the conditions under which banks can provide services to virtual asset service providers, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring. This development comes after the Pakistani government signed an agreement with Binance to explore tokenization opportunities and announced plans to promote crypto adoption, leverage Bitcoin mining, and introduce a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is a significant player in the global digital currency market.