The State Bank of Pakistan has officially lifted its seven-year ban on providing banking services to cryptocurrency firms, allowing banks to open accounts for licensed virtual asset service providers. However, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This development follows the introduction of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority to oversee the sector.
Under the new framework, banks can provide services to licensed virtual asset service providers, as well as those seeking approval, provided they comply with anti-money laundering, know-your-customer, and counter-terrorism financing regulations. The central bank has outlined strict conditions for onboarding crypto firms, including license verification, enhanced due diligence, and ongoing transaction monitoring.
This move comes after the Pakistani government signed a memorandum of understanding with Binance to explore tokenizing bonds and commodity reserves, and announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin. With approximately 40 million people, or 17% of the population, involved in crypto trading, Pakistan is the third-largest retail crypto market, surpassing countries like Germany and Japan.