The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, notifying all banks and financial institutions of the change. While the new regulations permit banks to offer services to licensed virtual asset service providers, they are still prohibited from using their own funds or customer deposits to invest in, trade, or hold digital assets.
This development follows the introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee the sector. The central bank has replaced its 2018 ban with new rules, allowing regulated financial institutions to open accounts for cryptocurrency companies approved by PVARA. Under the revised framework, banks can provide services to licensed virtual asset service providers, as well as 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 specific conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction monitoring.
In a recent development, the Pakistani government and Binance signed a memorandum of understanding to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Furthermore, the Chairman of Pakistan's Virtual Assets Regulatory Authority has announced plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in cryptocurrency trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.