The State Bank of Pakistan has lifted a long-standing ban on cryptocurrency, allowing banks to work with registered crypto firms.
The State Bank of Pakistan has officially lifted an eight-year prohibition on cryptocurrency activities, allowing local banks to establish accounts for registered virtual asset service providers (VASPs) and their customers.
This change follows the passage of the Virtual Assets Act, 2026, which has prompted the central bank to release BPRD Circular Letter No. 10 of 2026, now permitting regulated institutions to maintain banking relationships with crypto companies.
Pakistan is making significant strides to formalize its virtual asset sector. The new regulations will help regulate the market effectively.
— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) April 14, 2026
Under the new framework, banks are restricted to offering support services, as they remain prohibited from directly investing in or trading virtual assets with their funds or client deposits. As a result, crypto firms will maintain dedicated bank accounts in Pakistani rupees, with strict regulations against mixing these with other operational funds.
In order to comply with anti-money laundering and counter-terrorism financing laws, banks will need to conduct detailed due diligence on each VASP and revise risk assessments to reflect the distinct nature of cryptocurrency operations. Continuous monitoring of VASP relationships and the reporting of suspicious activities to the country’s financial intelligence unit are also mandated.
Path to Regulation
This regulatory shift marks a progressive move towards the formalization of Pakistan's crypto industry, stepping back from a previous proposal in 2022 to ban all cryptocurrencies. The Virtual Assets Act was enacted in March 2026, while the Pakistan Virtual Assets Regulatory Authority (PVARA), created in July 2025, oversees licensing and compliance for the sector.
The passage of the Virtual Assets Act in 2026 is a vital step towards a structured regulatory environment for Pakistan’s expanding digital finance landscape.
— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) March 6, 2026
Pakistan has also invited prominent global crypto firms to engage in its evolving digital economy, exemplified by a memorandum signed with SC Financial Technologies, a platform connected to the sons of former U.S. President Donald Trump, aimed at exploring USD1 stablecoin use in digital transactions.
Additionally, in a move to bolster crypto operations, Pakistani authorities allocated 2 GW of electricity for Bitcoin mining and AI initiatives in 2025.
