Pakistan has ended a seven-year ban that blocked banks from servicing crypto businesses, opening the door for regulated access to a market that already counts tens of millions of local traders. The move sets clear limits: banks can support licensed crypto providers but cannot trade, invest in or hold digital assets themselves.Singapore Summit: Meet the largest APAC brokers you know (and those you still don't!).Banks Can Serve Licensed Crypto Firms OnlyThe State Bank of Pakistan (SBP) notified all banks and financial institutions that they may now provide services to virtual asset service providers, or VASPs, that hold licenses from the Pakistan Virtual Asset Regulatory Authority (PVARA). The decision replaces the 2018 blanket ban on crypto-related banking.Under the new framework, banks can open and maintain accounts for VASPs that PVARA has approved or that are seeking approval. They must meet strict anti-money laundering, know-your-customer and counter-terrorism financing rules. The SBP set detailed onboarding conditions, including verification of licenses, enhanced due diligence and ongoing monitoring of transactionsPakistan has taken an important step toward formalising its virtual asset ecosystem.Following the enactment of the Virtual Assets Act, 2026, the State Bank of Pakistan has issued BPRD Circular Letter No. 10 of 2026, enabling regulated entities to open and maintain bank accounts… pic.twitter.com/cuUhwSiCfS— Pakistan Virtual Assets Regulatory Authority (@PakistanVARA) April 14, 2026Banks still face a strict prohibition on direct exposure to crypto. They cannot trade, invest in or hold digital assets with their own funds or with customer deposits. The central bank stressed that regulated entities may only provide banking services to licensed firms and cannot engage in crypto activity on their balance sheets.Part of a Wider Virtual Asset StrategyThe policy change follows the 2026 Virtual Assets Act, which created PVARA to license, regulate and supervise the crypto sector. It comes as Pakistan develops broader plans for tokenized state assets, expanded Bitcoin mining and a national stablecoin.In December, the government and Binance signed a memorandum of understanding to explore tokenizing up to $2 billion in bonds, treasury bills and commodity reserves. That same month, PVARA Chairman Bilal Bin Saqib outlined plans to speed up crypto adoption, promote mining and launch a national stablecoin.The government estimates that roughly 40 million Pakistanis, about 17% of the population, already take part in crypto trading. Pakistan ranks as one of the world’s largest retail crypto markets, ahead of countries such as Germany and Japan. This article was written by Jared Kirui at www.financemagnates.com.

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