The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency businesses, notifying all banks and financial institutions of the change. While the ban has been lifted, financial institutions are still barred from using their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets, as per the new regulations. This development follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the sector.
The new rules replace the 2018 ban and allow regulated banks and financial institutions to open accounts for cryptocurrency firms that have been approved by PVARA. Under the framework, banks can provide services to licensed virtual asset service providers (VASPs) and those seeking approval, provided they adhere to strict anti-money laundering, know-your-customer, and counter-terrorism financing regulations.
The State Bank of Pakistan stated that, subject to strict compliance, its regulated entities may open bank accounts for PVARA-licensed VASPs. The central bank has also outlined detailed conditions for onboarding cryptocurrency firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. In a recent development, the Pakistani government and Binance signed a memorandum of understanding to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves.
Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority 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 crypto market by retail activity, surpassing countries like Germany and Japan.