The central bank of Pakistan has informed all banks and financial institutions in the country that the ban on providing crypto services has been lifted.
However, according to the new state bank rules, banks are prohibited from investing, trading or holding crypto assets using their own funds or customer deposits.
The State Bank of Pakistan’s decision follows the recent enactment of the Virtual Assets Act, 2026, which establishes the Pakistan Virtual Assets Regulatory Authority (PVARA) to license, regulate and supervise 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 PVARA-approved crypto companies.
Under the new state banking framework, banks can provide services to virtual asset service 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 terrorism financing regulations.
“Subject to strict compliance with the conditions outlined herein, SBP Regulated Entities (REs) may open bank accounts of entities duly approved by PVARA as Virtual Asset Service Providers (VASPs),” the State Bank of Pakistan said.
The central bank’s rules also set out detailed conditions for onboarding crypto companies, which include mandatory license verification, enhanced due diligence and continuous supervision of all their transactions.
In December, the government of Pakistan and Binance signed a memorandum of understanding allowing the world’s largest cryptocurrency exchange by trading volume to explore the tokenization of up to $2 billion of bonds, treasury bills and commodity reserves in Pakistan.
The same month, 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, leverage Bitcoin mining, and launch a national stablecoin.
About 40 million, or about 17% of Pakistan’s population, are involved in cryptocurrency trading, the government said in February. The country is the third largest crypto market in terms of retail activity, ahead of countries like Germany and Japan.
