Pakistan Ends Crypto Ban: Banks Can Now Support Crypto Firms

Pakistan has officially taken a major step in its digital finance journey by lifting its long-standing crypto ban after seven years. In a move that signals a shift in policy direction, banks are now allowed to support crypto-related businesses—something that was previously off-limits.

This change could reshape how cryptocurrency operates in the country, opening doors for investors, startups, and financial institutions alike. While the decision doesn’t instantly turn Pakistan into a fully regulated crypto market, it clearly shows that the government is moving toward a more structured and open approach.

In this article, we’ll break down what exactly has changed, what it means for banks and everyday users, and what to expect next from Pakistan’s evolving crypto landscape.

What Changed in Pakistan’s Crypto Policy?

Pakistan’s latest shift is not just a headline change. It marks a move from broad banking restrictions toward a regulated model for crypto-related businesses. Recent reporting says banks and financial institutions can now provide services to licensed or registered virtual asset firms, replacing the earlier blanket restriction that had been in place since 2018. Reports also note that banks still are not being allowed to directly trade or hold crypto for themselves under this change.

Here’s what changed in simple terms:

• The old banking ban was lifted. Pakistan has ended the restriction that prevented banks from servicing crypto businesses.
• Banks can support licensed crypto firms. That includes basic banking access for regulated virtual asset service providers, which could make it easier for exchanges and related businesses to operate inside the formal financial system.
• The focus is now on regulation, not outright blocking. Pakistan already moved earlier in 2026 to create a legal framework for virtual assets through the Virtual Assets Act, which established a regulator for licensing and supervision.
• Investor protection and compliance are now central. The law and recent policy direction emphasize licensing, oversight, transparency, and controls against money laundering and related financial risks.
• There are still limits. This does not mean every crypto activity is suddenly unrestricted. The shift appears to favor supervised, licensed participation rather than an open, unregulated market.

So, the real policy change is this: Pakistan is moving away from treating crypto as something banks must avoid and toward treating it as something that can be allowed under rules, licenses, and oversight. That is a big difference for the country’s financial system and for any business that wants to operate legally in the crypto space.

Crypto in Pakistan Before vs After the Ban

To understand the significance of this decision, it helps to look at how things have changed over time.

 

Aspect	Before Ban Lift	After Ban Lift
Legal Status	Unclear/restricted environment	Moving toward a regulated framework
Banks	Prohibited from supporting crypto	Allowed to serve licensed crypto businesses
Crypto Businesses	Operated informally or offshore	Can operate more openly (with licensing)
Investor Access	Limited, often risky	Likely to become safer and more structured
Government Approach	Avoidance and warnings	Regulation and oversight focus

 

What This Means for Banks and Financial Institutions?

For banks in Pakistan, the State Bank of Pakistan, this policy shift opens up a completely new space that was previously off-limits. Instead of staying away from crypto entirely, they can now start engaging—carefully—with regulated businesses in this sector. 

a) New Opportunities for Banks

Banks can now position themselves as key players in the growing crypto ecosystem by offering services such as:

• Business accounts for crypto companies
  Exchanges and virtual asset firms can finally access formal banking channels
• Payment processing
  Handling deposits, withdrawals, and transfers linked to crypto platforms
• Custody and safeguarding services (in the future)
  Secure storage solutions for digital assets, if regulations allow
• Compliance and advisory services
  Helping crypto firms meet regulatory and financial reporting standards

b) Compliance Will Be a Big Deal

This isn’t a free pass for banks to jump into crypto without limits. In fact, regulation will likely be stricter than ever.

Banks will need to focus on:

• KYC (Know Your Customer) procedures
• AML (Anti-Money Laundering) compliance
• Monitoring suspicious transactions
• Working only with licensed crypto businesses

This means only serious, compliant players will benefit—reducing the chances of fraud and illegal activity.

c) Challenges Banks May Face

Even with the opportunity, banks won’t move aggressively right away. There are real concerns:

• Regulatory uncertainty (rules are still evolving)
• Reputation risk linked to crypto volatility
• Lack of internal expertise in digital assets
• Technology upgrades needed to support crypto-related services

d) A Gradual Shift, Not an Instant Boom

Most banks are likely to take a cautious, phased approach:

• Start with basic services
• Observe regulatory clarity
• Expand offerings over time

This measured approach is actually a good sign—it shows the system is moving toward controlled adoption, not chaos.

Impact on Crypto Businesses and Startups

For crypto businesses in Pakistan, this policy shift could be a turning point. What was once a difficult and uncertain environment may now start to look more like a legitimate, regulated market.

1. Easier to Operate Legally

Before this change:

• Many crypto startups operated in legal gray areas
• Access to banking was a major hurdle
• Some businesses had to rely on foreign accounts or workarounds

Now:

• Businesses can potentially register, get licensed, and operate locally
• Access to banking services makes day-to-day operations smoother
• It becomes easier to build trust with users and investors

2. Increased Investor Confidence

When a country starts regulating instead of restricting, it sends a strong signal.

This could lead to:

• More local investment in crypto startups
• Interest from international investors
• Growth in venture capital funding for fintech and blockchain projects

Investors generally prefer markets where rules exist—even if they’re strict—because it reduces uncertainty.

3. Growth of the Fintech Ecosystem

This move doesn’t just help crypto companies—it can boost the entire tech space.

Potential ripple effects:

• Rise of blockchain-based startups
• Innovation in payments, remittances, and DeFi solutions
• Collaboration between banks and tech companies

Pakistan already has a strong freelance and tech community. With better support, that ecosystem could expand further.

4. Opportunities for Global Partnerships

With clearer regulations, Pakistani companies may find it easier to:

• Partner with international crypto exchanges
• Work with global fintech firms
• Attract foreign talent and expertise

This can help local startups scale faster and compete beyond the domestic market.

5. Still Not a Free-for-All

Despite the optimism, there are still limits:

• Only licensed businesses are likely to benefit
• Strict compliance requirements will apply
• Regulatory clarity is still evolving

Startups will need to focus on transparency, security, and compliance to succeed in this new environment.

For the average person in Pakistan, this shift could make crypto more accessible, safer, and easier to use—though not completely risk-free.

6. Easier Access to Crypto

Earlier, getting into crypto wasn’t simple:

• Many users relied on peer-to-peer (P2P) platforms
• Bank transfers linked to crypto were often blocked or flagged
• There was always uncertainty around legality

Now, things may gradually improve:

• More local platforms could emerge
• Banking channels may support deposits and withdrawals
• The overall process could become more user-friendly

7. Potential for Safer Transactions

With regulation and bank involvement:

• Users may get better protection against scams
• Platforms could be required to follow security standards
• Transactions may become more transparent and traceable

This doesn’t eliminate risk—but it does reduce the “wild west” nature of earlier crypto use.

8. Big Advantage for Freelancers

Pakistan has a huge freelance community, and this change could directly benefit them.

Possible advantages:

• Easier to receive payments in crypto
• Fewer issues converting crypto into local currency
• More flexibility in working with international clients

9. Impact on Remittances

Crypto has long been seen as a cheaper alternative for sending money across borders.

With better support:

• Overseas Pakistanis may use crypto for faster transfers
• Transaction costs could be lower than traditional channels
• Funds may reach recipients more quickly

10. New Opportunities for Young Investors

For young people interested in crypto:

• Entry barriers may become lower
• Access to regulated platforms could increase confidence
• Educational resources and awareness may grow

But Risks Still Exist

Even with these improvements, users should stay cautious:

• Crypto prices are highly volatile
• Not all platforms will be trustworthy
• Regulations are still evolving

So while access is improving, responsible use and awareness are still essential.

Is Cryptocurrency Now Fully Legal in Pakistan?

This is the question most people are asking—but the answer isn’t a simple yes or no.

The Current Status: Allowed, But Not Fully Open

Pakistan has not fully legalized cryptocurrency in the traditional sense. Instead, it has taken a more controlled approach:

• Crypto is moving toward a regulated environment
• Banks can now support licensed crypto businesses
• The government is working on formal oversight and licensing systems

So rather than a complete green light, this is more like a “regulated entry” into the system.

What’s Still Unclear

Even with this major step, some areas remain uncertain:

• Can individuals freely trade crypto on all platforms?
• What taxes will apply to crypto gains?
• Which platforms will be officially approved or licensed?
• How strict will compliance rules be?

These details will likely be defined as regulations continue to evolve.

Role of Regulation Going Forward

Authorities are expected to focus on:

• Licensing crypto exchanges and service providers
• Monitoring transactions for illegal activity
• Protecting users from fraud and scams

This means crypto in Pakistan will likely operate under rules similar to traditional finance, rather than being completely decentralized and unrestricted.

How Pakistan Compares to Other Countries

Pakistan’s move toward regulating crypto instead of restricting it follows a broader global trend—but each country is taking a slightly different path.

 

Country	Approach to Crypto	Key Highlights
Pakistan	Moving toward regulation	Banks can support licensed crypto businesses
India	Strict but allowed	Heavy taxes, strong monitoring
UAE	Crypto-friendly hub	Clear regulations, global crypto companies welcomed
USA	Regulated but complex	Multiple regulators, evolving policies

The key difference now is direction—Pakistan is moving forward, not staying stuck in uncertainty.

Conclusion

Pakistan lifting its crypto ban after seven years marks a significant shift in how the country views digital assets. By allowing banks to support crypto businesses, the government is opening the door to a more structured and regulated ecosystem, as reflected in recent updates from the Ministry of Finance

This doesn’t mean crypto is fully unrestricted—but it does signal progress. Businesses can operate more confidently, banks can explore new services, and everyday users may soon experience safer and easier access to crypto.

At the same time, risks and uncertainties remain. Regulations are still evolving, and both users and institutions will need to adapt as the framework develops.

The key takeaway is simple: Pakistan is no longer resisting crypto—it’s starting to regulate it. And that shift could shape the future of finance in the country.