The Central Bank of Pakistan notified all banks and financial institutions in the country that the ban on providing crypto services has been lifted.
However, according to the new state banking rules, banks are prohibited from investing, trading or holding crypto assets using their own funds or customer deposits.
The State Bank of Pakistan’s move follows the recent passage of the 2026 Virtual Assets Act, which establishes the Pakistan Virtual Asset Regulatory Authority (PVARA) to license, regulate and oversee the sector.
The central bank replaced its 2018 ban on crypto with new rules that allow regulated banks and other financial institutions to open accounts for crypto firms approved under PVARA.
Under the new state banking framework, banks can provide services to virtual asset providers (VASPs) licensed under the new crypto law, as well as those seeking approval, subject to strict compliance with anti-money laundering (AML), know-your-customer (KYC) and other counter-terrorism financing regulations.
“Subject to strict compliance with the conditions outlined herein, SBP Regulated Entities (REs) may open bank accounts with entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs),” State Bank of Pakistan said.
The central bank’s rules also set out detailed conditions for the onboarding of crypto firms, which include mandatory verification of licenses, enhanced due diligence and ongoing oversight of all their transactions.
In December, the government of Pakistan and Binance signed a memorandum of understanding (MOU) that allows the world’s largest crypto 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 his country’s plans to accelerate crypto adoption, harness Bitcoin mining and launch a national stablecoin.
About 40 million, or about 17% of Pakistan’s population, are involved in crypto trading, the government said in February. The country is the third largest crypto market by retail activity, ahead of places like Germany and Japan.
