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Pakistan has ended a seven-year restriction on banks working with cryptocurrency businesses, marking a significant shift in the country’s approach to digital assets. The move, approved by the State Bank of Pakistan (SBP), allows banks and financial institutions to offer services to licensed crypto firms, opening the door to regulated access for millions of users across the country.
Banks will still not be permitted to trade, invest in, or hold cryptocurrencies themselves under the new arrangement, which places present cryptocurrency activity under legal oversight. The goal, according to officials, is to reduce risks like fraud and money laundering while allowing the sector to operate within predetermined parameters.
“Subject to strict compliance with the conditions outlined herein, SBP Regulated Entities (REs) may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs),” the State Bank of Pakistan said.
In 2018, Pakistan banned banks from managing cryptocurrencies. The SBP enacted regulations that forbade financial institutions from supporting Bitcoin transactions due to concerns about volatility and a lack of oversight. Consequently, official banking systems were effectively shut off from the industry. Despite the constraints, individual trading continued to grow. Businesses, meanwhile, were left in a legal uncertainty and without access to banking infrastructure. Uncertain restrictions hindered the industry’s ability to expand safely.
By 2026, the global landscape will have shifted. Adoption of digital assets has expanded, regulatory frameworks have matured, and blockchain technology has found uses beyond speculation. Pakistan introduced the Virtual Assets Act and created a dedicated regulatory authority for digital assets. The new framework seeks to bring these activities into the formal economy under clear rules.
Pakistan’s Virtual Assets Act 2026, which replaces the nation’s prior cryptocurrency ban with a formal legislative framework, represents a significant turning point. By establishing precise compliance standards and operational guidelines and restricting participation to registered companies, the Act guarantees that fraud and illegal activity are kept firmly in check.
The law provides control and legitimacy for a sector that had previously functioned in uncertainty by establishing a structured mechanism that transfers cryptocurrency activity from an unofficial setting into the legitimate economy.
Pakistan has taken an important step toward formalising its virtual asset ecosystem.
Following the enactment of the Virtual Assets Act, 2026, the State Bank of Pakistan has issued BPRD Circular Letter No. 10 of 2026, enabling regulated entities to open and maintain bank accounts… pic.twitter.com/cuUhwSiCfS
— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) April 14, 2026
The Pakistan Virtual Assets Regulatory Authority (PVARA) is the body responsible for supervising the country’s crypto sector. It oversees licensing, compliance, and enforcement across exchanges, wallet providers, and other digital asset businesses.
A licence from PVARA is required for any business looking to function as a Virtual Asset Service Provider (VASP). Checks on operational openness, security systems, and financial integrity are all part of the process.
Licensed companies are required to follow Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations. These measures act as a filter, ensuring that only trustworthy, law-abiding businesses are allowed to enter the market. By setting strict licensing and compliance standards, PVARA is working to build an environment where risks are minimised and both users and investors can feel genuinely secure.
The new regulations allow Pakistani banks to offer regulated cryptocurrency companies basic services. Account opening, transaction processing, and meeting operational requirements are all included in this. Crypto companies can now operate within regulated channels since they have access to the legitimate banking system for the first time.
Banks are still prohibited from using their own money or client deposits to invest in, trade, or keep cryptocurrencies notwithstanding this access. The division guarantees that the volatility of digital assets is not directly linked to the risks associated with traditional banking.
Pakistan has signed an agreement with Binance to explore tokenising up to $2 billion in assets, including bonds and commodities. The initiative focuses on testing how tokenisation could change the way assets are traded and managed within regulated channels. The government is also examining stablecoin-based systems for cross-border transactions. The aim is to lower remittance costs and improve access for overseas Pakistanis sending money back home.
Around 40 million people in Pakistan, about 17 per cent of the population, are engaged in crypto trading. This level of participation shows that digital assets have moved beyond niche use and are now part of mainstream financial activity. Pakistan ranks third, ahead of Germany and Japan, in terms of retail activity in Bitcoin marketplaces. This degree of adoption shows the country’s growing role in the global digital financial scene, with new laws aimed at integrating this activity into the formal economy.
