In a significant move that could reshape its financial landscape, Pakistan has lifted its longstanding ban on cryptocurrency services. This change heralds a transformative approach to digital assets, signaling a new direction for the nation’s banking and financial institutions.
What Are the New Regulations?
Following the easing of the ban, new directives have been outlined by the Central Bank. These regulations, however, strictly prohibit banks from investing in or trading cryptocurrencies themselves. Banks are prevented from using customer deposits to finance such activities or holding crypto assets directly.
Despite these restrictions, the decision does not entirely shut off opportunities within the crypto space. Instead, it creates a structured environment where licensed crypto entities can access banking services while complying with specific conditions.
How Will the 2026 Virtual Assets Act Affect Operations?
The updated policy aligns with the introduction of the 2026 Virtual Assets Act, establishing a dedicated regulatory body—the Pakistan Virtual Assets Regulatory Authority (PVARA). PVARA’s role is pivotal, as it licenses, supervises, and regulates digital asset operations across the country.
The removal of the crypto ban, first enforced in 2018, now legally enables companies, duly licensed by PVARA, to utilize banking services, fostering a more inclusive digital economy.
The new regulations demand rigorous oversight from banks, allowing engagement only with licensed or PVARA-approved virtual asset service providers (VASPs). Compliance with anti-money laundering (AML), know-your-customer (KYC), and counter-terrorism financing standards is non-negotiable.
“Provided that all prescribed conditions are strictly observed, institutions regulated by the Central Bank can open bank accounts for virtual asset service providers officially licensed by PVARA,” the statement read.
For collaboration with crypto firms, banks are required to verify licenses, ensure thorough due diligence, and adhere to ongoing regulatory audits.
Recent developments have intensified crypto activity in Pakistan. A landmark agreement between the government and Binance, the world’s largest crypto exchange, will tokenize substantial financial assets within the country, indicating a supportive stance towards crypto innovation.
Notably, Pakistan is gearing up for broader adoption, with efforts to enhance crypto mining and establish a national stablecoin. Reportedly, a significant portion of the population—around 40 million individuals—are already involved in crypto trading, surpassing the retail market scope of certain major economies.
