The Central Bank of Pakistan informed all banks and financial institutions in the country that the ban on providing crypto services has been lifted.
However, according to new Bank Negara regulations, banks are not allowed to use their own funds or customer deposits to invest, trade or hold crypto assets.
The move by the State Bank of Pakistan follows the recent enactment of the Virtual Assets Act 2026, which established the Pakistan Virtual Assets Regulatory Authority (PVARA) to license, regulate and supervise the industry.
The central bank replaced a 2018 cryptocurrency ban with new rules that allow regulated banks and other financial institutions to open accounts for PVARA-approved cryptocurrency companies.
Under the new national banking framework, banks can provide services to virtual asset service providers (VASPs) licensed under the new crypto bill as well as providers seeking approval, but must strictly comply with anti-money laundering (AML), know your customer (KYC) and other counter-terrorism financing regulations.
“Subject to strict compliance with the conditions stated herein, SBP Regulated Entities (RE) may open accounts in bank accounts of Virtual Asset Service Provider (VASP) entities duly licensed by PVARA,” the State Bank of Pakistan said.
The central bank’s rules also set out detailed conditions for onboarding cryptocurrency companies, which include mandatory verification of licenses, enhanced due diligence and ongoing supervision of all their transactions.
In December last year, the Pakistani government and Binance signed a memorandum of understanding (MOU) allowing the world’s largest cryptocurrency exchange by trading volume to explore the tokenization of up to $2 billion of Pakistan’s bonds, treasury bills, and commodity reserves.
In the same month, Bilal Bin Saqib, chairman of Pakistan’s Virtual Asset Regulatory Authority (VARA), announced in a video interview with CoinDesk that Pakistan plans to accelerate cryptocurrency adoption, utilize Bitcoin mining and launch a national stablecoin.
The government said in February that approximately 40 million people (about 17%) of Pakistan’s population were involved in cryptocurrency transactions. The country is the third-largest cryptocurrency market by retail activity, ahead of countries such as Germany and Japan.
