oversee the sector. Pakistan just reopened the door between its banks and crypto. The State Bank of Pakistan formally ended an eight-year ban on Tuesday that had stopped banks from working with crypto companies. Licensed virtual asset providers can now open dedicated bank accounts, hold customer funds in separate Pakistani rupee accounts, and process payments through the formal banking system.
The ban dated back to 2018, when Pakistan's central bank told all banks to stay away from crypto. The reversal follows the passage of the 2026 Virtual Assets Act, which created the Pakistan Virtual Asset Regulatory Authority to license and regulate the industry.
Banks still can't trade, invest in, or hold crypto with their own funds or customer deposits - but they can now serve licensed companies that need basic banking to operate.
Pakistan is already one of the largest retail crypto markets in the world, with millions of people trading through peer-to-peer networks because banks couldn't touch the industry. Bringing that activity into the regulated banking system gives the sector legitimacy and makes it easier for companies to build real businesses. The bigger plan: Pakistan has also signaled ambitions around tokenized state assets, expanded Bitcoin mining, and a possible national stablecoin.
Pakistan joins a growing list of emerging markets choosing regulation over bans. The question is whether banking infrastructure can scale fast enough to meet demand from an industry that's been operating in the shadows for nearly a decade.
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