In the notification sent to all banks and financial institutions in the country, the Central Bank of Pakistan announced that the ban on cryptocurrency services has been lifted. With this development, the Pakistani financial sector has seriously updated its approach towards virtual assets.
The ban has been lifted, new restrictions have come
Despite the lifting of the ban decision, within the scope of the new rules put into effect by the Central Bank, banks will not be able to invest in cryptocurrencies, make purchases and sales, and directly own assets using their own funds or customer deposits.
While the regulation restricts the transactions of banks, it does not leave a completely closed system for the crypto market. Instead, it opens the way for licensed institutions to provide services within the permitted limits.
The basis of the new regulation: 2026 Virtual Assets Law
This step follows the recently passed Virtual Assets Act of 2026. With the said law, a new regulatory body was established for the virtual asset industry in Pakistan. Pakistan Virtual Assets Regulatory Authority (PVARA) has been authorized for the licensing, supervision and control of the sector. Thus, the way was cleared for crypto companies in the country to operate within the legal framework.
The Central Bank withdrew the cryptocurrency ban, which had been in effect since 2018, and passed a new regulation that allows companies approved by PVARA to benefit from banking services.
Strict supervision and conditions for banks
With the new regulation, banks and financial institutions will only be able to provide services to virtual asset service providers (VASPs) that are officially licensed by PVARA or are in the application process. Here, compliance with all obligations regarding anti-money laundering (AML), customer identification (KYC) and combating terrorist financing was required.
“Provided that all conditions specified herein are strictly complied with, institutions regulated by the Central Bank can open bank accounts of virtual asset service providers officially licensed by PVARA,” it was stated.
For banks to work with crypto companies, license verification, comprehensive review processes and periodic audits of all transactions have become mandatory.
Cooperation with Binance and local market size
Last December, the government of Pakistan and Binance, the world’s largest crypto exchange by transaction volume, signed a cooperation agreement that envisions the tokenization of bonds, treasury bills and commodity reserves in the country totaling up to $2 billion.
Around the same time, Bilal Bin Saqib, Chairman of the country’s Virtual Assets Regulatory Authority, revealed in an interview with CoinDesk that Pakistan aims to accelerate crypto adoption, leverage Bitcoin mining and launch a national stablecoin.
According to official data announced in February, approximately 40 million people in the country, that is, 17 percent of the population, trade cryptocurrencies. This places Pakistan ahead of countries like Germany and Japan in the retail crypto market.
