The State Bank of Pakistan has notified all financial institutions that the long-standing ban on providing services to cryptocurrency companies has been lifted. However, under the new regulations, banks are prohibited from using their own funds or customer deposits to invest in, trade, or hold cryptocurrencies. This move follows the recent passage 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 banks to open accounts for crypto firms approved by PVARA. Banks can now 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 has outlined detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing transaction supervision. Recently, the Pakistani government signed an agreement with Binance to explore tokenizing up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of PVARA 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.