Pakistan Central Bank Lifts Seven-Year Ban Allowing Banks To Serve Licensed Crypto Firms

Pakistan's central bank has officially lifted its seven-year ban on banking services for cryptocurrency firms.

“Pakistan lifts seven-year ban, allowing banks to service crypto providers Pakistan sent a letter to all banks and financial regulatory firms notifying them that they may provide crypto services,, but remain barred from trading or holding crypto assets”

@coindesk

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.

@coindesk

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.

Banks must establish separate Client Money Accounts denominated in Pakistani rupees.

These accounts must remain strictly segregated with zero tolerance for commingling client assets.

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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.

The banking rule change removes a major operational headache for Pakistan's crypto community.

“Pakistan’s central bank has formally reversed its long-standing ban on banking services for cryptocurrency firms, allowing regulated banks to open accounts for licensed virtual asset service providers (VASPs) under a new legal framework”

Bitcoin Magazine

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.