The central bank of Pakistan has officially reversed the longstanding ban it had on banks providing banking services to cryptocurrency companies.
State Bank of Pakistan announced the decision in a circular. reported By: Reuters. This follows the enactment by the Virtual Assets Act of 2026, and is the first step in integrating digital assets into the formal financial system.
“This is a foundational step in bringing virtual assets into the formal financial system of Pakistan,” You can also read about the importance of this in our article Bilal bin SaqibIn an official announcement, the chairman of Pakistan Virtual Assets Regulatory Authority.
The new rule allows banks to provide financial services for crypto companies, provided they first confirm that these entities have been licensed by PVARA. The financial risk has been mitigated by implementing strict measures to comply with AML/CTF and AML/CTF regulations.
The banks are expected to perform full due diligence on VASP clients and maintain up-to-date risk profiles. They must also report any suspicious transactions to the regulators.
They also must make sure that the client’s funds are kept in non-interest bearing accounts in Pakistani rupees. It is against the law to mix company and customer funds.
Pakistani banks can still not invest in crypto or bitcoin
But the central bank is firm in its stance against direct exposure to digital asset. The central bank has explicitly prohibited banks from trading or investing in cryptocurrencies with their capital or deposits of customers. They are limited in their role to providing payment rails, and as custodians of fiat money tied to authorized crypto activities.
It is an abrupt reversal. Pakistan’s Policy of 2018, which cut crypto firms off from the banking sector and suppressed growth in industry. Now that the framework is in place, the authorities have begun positioning Canada as a hub of digital asset innovation.
Pakistan is already taking steps to attract crypto-players from around the world. In December, Pakistani officials signed an agreement with Binance to promote the use of crypto currencies. explore Binance and HTX have received their initial regulatory clearances for tokenization efforts that could potentially involve up to 2 billion dollars in assets.
The country is also exploring the use of stablecoins to facilitate cross-border payment through discussions with a World Liberty Financial affiliate.
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Source: bitcoinmagazine.com
