Pakistan’s Central Bank has announced the removal of its ban on cryptocurrency services in a notice sent to all banks and financial institutions. This landmark decision reflects a significant overhaul of the country’s approach to digital assets, positioning its financial sector for a new era.
Ban lifted but strict conditions imposed
Although the ban has been lifted, new regulations from the Central Bank prohibit banks from investing in cryptocurrencies with their own funds or customer deposits, engaging in crypto trading, or holding such assets directly.
While these measures restrict banks’ direct involvement with crypto assets, the updated policy does not fully close the door on digital finance. Instead, it offers a pathway for licensed entities within the sector to access banking services under clear conditions.
New rules based on the 2026 Virtual Assets Act
This policy shift follows the recent introduction of the 2026 Virtual Assets Act, which established a dedicated regulator for digital assets in Pakistan. The Pakistan Virtual Assets Regulatory Authority (PVARA) now oversees licensing, supervision, and regulation of the sector, enabling crypto companies to operate within a defined legal framework.
By officially repealing the crypto ban that had been in effect since 2018, the Central Bank now permits banking services for companies approved by PVARA, opening formal doors for the digital asset industry.
Tight oversight and compliance for banks
Under the new rules, banks and financial institutions are permitted to engage only with virtual asset service providers (VASPs) that are formally licensed or undergoing the approval process with PVARA. Compliance with all anti-money laundering (AML), customer identification (KYC), and counter-terrorism financing standards is mandatory.
“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 banks to serve crypto-related firms, they must verify licensing, conduct comprehensive due diligence, and subject all operations to ongoing regulatory audits.
Major Binance deal and soaring crypto adoption
Last December, the Pakistani government and Binance—the world’s largest crypto exchange by trading volume—signed a pivotal agreement to tokenize up to $2 billion in bonds, treasury bills, and commodity reserves in the country.
Around the same time, Bilal Bin Saqib, head of PVARA, told CoinDesk that Pakistan aims to accelerate crypto adoption, benefit from Bitcoin mining, and launch a national stablecoin in the near future.
According to official data released in February, about 40 million people—or roughly 17% of the population—actively trade cryptocurrencies in Pakistan. This makes Pakistan’s retail crypto market larger by user numbers than nations like Germany and Japan.
