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Pakistan Lifts Crypto Banking Ban
Pakistan's central bank has officially lifted its seven-year ban on banking services for cryptocurrency firms.
“Pakistan’s central bank has lifted its blanket ban on crypto services, allowing banks and financial institutions to serve licensed crypto firms under a new regulatory framework”
The State Bank of Pakistan notified all banks that they may provide crypto services but remain barred from trading or holding crypto assets with their own funds or customer deposits.
Banks are authorized to open accounts for virtual asset service providers licensed by PVARA, subject to strict AML and KYC compliance.
The move comes as Pakistan pursues plans for tokenized state assets, expanded Bitcoin mining, and a national stablecoin.
The decision marks a foundational step in bringing virtual assets into Pakistan's formal financial system.
Strict Compliance and Segregation
Banks must establish separate Client Money Accounts denominated in Pakistani rupees.
These accounts must remain strictly segregated with zero tolerance for commingling client assets.
Banks must conduct full due diligence and maintain ongoing monitoring of all transactions.
Any suspicious activity must be reported immediately to Pakistan's Financial Monitoring Unit.
Banks are explicitly prohibited from investing in, trading, or holding virtual assets using their own funds or customer deposits.
Market Reaction and Industry Impact
The banking rule change removes a major operational headache for Pakistan's crypto community.
“Roughly 40 million or about 17% of the Pakistani population are involved in crypto trading”
Roughly 40 million people or about 17% of the population are involved in crypto trading.
Pakistan is the third-largest crypto market by retail activity, ahead of Germany and Japan.
Pakistan signed a memorandum of understanding with Binance to explore tokenization of up to $2 billion in assets.
PVARA Chairman Bilal Bin Saqib called the decision an important first step.