The State Bank of Pakistan has officially lifted its seven-year ban on providing services to cryptocurrency firms, notifying all banking and financial institutions that they are now allowed to offer their services to these companies. However, the new regulations stipulate that banks are not permitted to invest in, trade, or hold cryptocurrency using their own funds or customer deposits.
This move follows the recent introduction of the Virtual Assets Act of 2026, which established the Pakistan Virtual Asset Regulatory Authority to oversee and regulate the sector. The central bank has replaced its 2018 ban with new guidelines that enable regulated banks and financial institutions to open accounts for crypto firms approved by the regulatory authority. Under the new 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 detailed conditions for onboarding crypto firms, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions.
This development comes after the Pakistani government signed a memorandum of understanding with Binance to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves. Additionally, the Chairman of Pakistan's Virtual Assets Regulatory Authority has announced plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin, with approximately 40 million people, or 17% of the population, already involved in crypto trading, making Pakistan the third-largest crypto market by retail activity.