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Pakistan’s central bank has lifted its ban on crypto-related banking services and notified all banks and financial institutions of the change. The move lets regulated lenders open accounts for licensed crypto firms. At the same time, the new rules bar banks from investing in, trading, or holding crypto assets with their own funds or customer deposits. The decision follows Pakistan’s 2026 Virtual Assets Act, which created the Pakistan Virtual Assets Regulatory Authority to license, regulate, and supervise the sector.
The State Bank of Pakistan replaced its 2018 ban with a new framework for regulated access. Under the updated rules, banks and other financial institutions may serve crypto firms approved under PVARA. They may also work with firms that seek approval, but only under strict compliance controls.
The central bank said regulated entities may open bank accounts for firms that hold valid PVARA licenses as Virtual Assets Service Providers. It linked access to anti-money laundering rules, Know-Your-Customer (KYC) checks, and counter-terrorism financing (CTF) controls. As a result, banks must treat the sector as a regulated business, not an unrestricted activity.
The framework also establishes strict boundaries for bank balance sheets. Banks cannot use their money to buy or trade crypto assets. They also cannot use customer deposits to hold or trade them. Instead, the rules focus on account access and regulated financial services for approved crypto businesses.
The central bank set detailed conditions for onboarding crypto firms. Banks must verify licenses before opening accounts. They must also apply enhanced due diligence and supervise transactions on an ongoing basis. In turn, the rules place compliance at the center of every banking relationship within the sector.
This change matters because access to banking often decides whether a market stays informal or becomes regulated. By allowing licensed firms to open accounts and settle in local currency, Pakistan has opened formal financial rails to the sector. What changes when a market of this size gains regulated banking access?
The scale is difficult to ignore. Pakistan has more than 255 million people, according to UNFPA’s 2025 population data, while some 2026 population trackers place the population above 259 million. Reuters also reported in 2025 that Pakistan was exploring ways to use surplus electricity for bitcoin mining and AI data centers.
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In December, the government of Pakistan and Binance signed a memorandum of understanding. The agreement allows the exchange to explore the tokenization of up to $2 billion in bonds, treasury bills, and commodity reserves in Pakistan. That step linked digital assets to broader financial market activity.
That same month, Bilal Bin Saqib, chairman of Pakistan’s Virtual Assets Regulatory Authority, outlined wider ambitions in a CoinDesk video interview. He said the country planned to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin. Those plans aligned with the government’s broader shift toward regulated digital asset activity.
The government said in February that roughly 40 million Pakistanis, or about 17% of the population, are involved in crypto trading. It also said Pakistan ranks as the world’s third-largest crypto market by retail activity, ahead of Germany and Japan. Separately, a statement widely attributed to Prime Minister Shehbaz Sharif, calling crypto “the tool of the future,” has circulated broadly, although no official government transcript has confirmed the quote.
Pakistan has replaced its 2018 crypto banking ban with a regulated framework that lets licensed crypto firms access banking services. Still, banks cannot trade or hold digital assets. The move marks a major policy shift and places compliance, supervision, and formal market access at the center of Pakistan’s crypto strategy.
