The central bank of Pakistan has notified all banks and financial institutions that the prohibition on providing services to cryptocurrency companies has been lifted. However, according to the new regulations, banks are not allowed to use their own funds or customer deposits to invest in, trade, or hold cryptocurrency assets. This move by the State Bank of Pakistan follows the recent passage of the 2026 Virtual Assets Act, which established the Pakistan Virtual Asset Regulatory Authority (PVARA) to oversee and regulate the industry. The central bank has replaced its 2018 ban on cryptocurrencies with new rules that allow regulated banks and other financial institutions to open accounts for cryptocurrency companies that have been approved by PVARA.

Under the new framework, banks can provide services to virtual asset service providers (VASPs) that have been licensed under the new cryptocurrency law, as well as to those seeking approval, provided they comply with strict anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing regulations. The State Bank of Pakistan stated, "Subject to strict compliance with the conditions outlined, SBP Regulated Entities (REs) may open bank accounts for entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs)." The central bank's rules also outline detailed conditions for onboarding cryptocurrency companies, including mandatory license verification, enhanced due diligence, and ongoing supervision of all transactions. In December, the Pakistani government and Binance signed a memorandum of understanding (MOU) that would allow the world's largest cryptocurrency exchange by trading volume to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves in Pakistan.

That same month, the Chairman of Pakistan's Virtual Assets Regulatory Authority (VARA), Bilal Bin Saqib, announced in a video interview with CoinDesk that the country plans to accelerate cryptocurrency adoption, leverage Bitcoin mining, and launch a national stablecoin. Approximately 40 million people, or about 17% of Pakistan's population, are involved in cryptocurrency trading, according to the government.

Pakistan is the third-largest cryptocurrency market by retail activity, surpassing countries like Germany and Japan.