- Pakistan’s central bank has officially lifted its 2018 ban on crypto banking, letting financial institutions serve registered digital asset firms for the first time in eight years.
- Banks can now open accounts for crypto companies—but cannot trade or hold cryptocurrencies themselves.
- The reversal follows deals with Trump-linked World Liberty Financial and Binance that could bring billions in tokenized assets to the world’s fifth-most populous nation.
Pakistan just ended one of the longest crypto banking bans in Asia. The State Bank of Pakistan issued a letter this week formally rescinding restrictions it put in place in 2018—restrictions that effectively choked off the country’s crypto industry by cutting it off from the banking system entirely.
Under the new rules, Pakistani banks can now provide services to registered Virtual Asset Service Providers, or VASPs. That includes opening accounts, processing payments, and handling the kind of routine financial plumbing that every business needs. The catch: VASP funds must be kept strictly isolated from the banks’ standard client accounts, and banks are on the hook for monitoring their new crypto clients against money laundering regulations.
The banks themselves, however, remain locked out of trading, investing, or holding crypto with either their own money or customer deposits. Pakistan is essentially creating a bridge between traditional finance and crypto—without letting the banks cross over to the other side.
Why Pakistan Is Betting on Crypto Now
The timing is not coincidental. Pakistan enacted its Virtual Assets Act of 2026 last month, building an entire regulatory framework for the industry from scratch. The banking ban reversal is the first major test of that framework—roughly 240 million people now live in a country where their banks can legally interact with crypto firms.
The political catalyst was the Trump family. Weeks after President Donald Trump’s return to power, leaders of World Liberty Financial—the family’s crypto venture—flew to Islamabad to meet Pakistan’s Prime Minister Shehbaz Sharif. The visit wasn’t ceremonial. Pakistan soon signed an MOU with World Liberty Financial to explore using the company’s dollar-pegged USD1 stablecoin for cross-border remittances.
Pakistan receives over $30 billion in remittances annually. If stablecoins can shave even a fraction off transfer costs, that’s real money in a country where the average monthly income hovers around $150. The World Liberty deal isn’t charity—it’s a play for the remittance corridor that currently runs through Western Union and informal hawala networks.
Binance entered the picture separately. Pakistan signed an agreement with the exchange—another firm with ties to the Trump family—that could see the nation tokenize some $2 billion in assets. Two deals. Two crypto giants. One country desperate to modernize its financial infrastructure.
The Guardrails Keep Banks on a Tight Leash
Pakistan’s approach is cautious by design. The State Bank isn’t letting its financial institutions become crypto traders—banks serve as service providers only. VASP accounts must be segregated, meaning a bank can’t accidentally mix a crypto company’s operating funds with its own balance sheet. If a VASP goes belly-up, the bank’s other clients shouldn’t notice.
Anti-money laundering compliance falls squarely on the banks. They’re responsible for vetting their crypto clients, monitoring transactions, and flagging suspicious activity. It’s the same regulatory framework applied to any high-risk business—casinos, money changers, precious metals dealers—just applied to digital assets.
The VASP label itself carries weight. Only registered and approved crypto companies qualify for banking access. Unregistered operators—which make up the vast majority of Pakistan’s current crypto activity—remain locked out. The policy rewards compliance while leaving the shadow market untouched, at least for now.
Pakistan isn’t the first country to try this dance. India imposed a 30% crypto tax in 2022 that cratered trading volumes. Nigeria restricted bank-crypto interactions before eventually loosening them. The difference is scale—Pakistan’s 240 million people represent a larger potential market than either of those examples.
The country’s crypto community has been waiting for this moment since 2018, when the State Bank’s circular effectively froze the industry. Eight years is a long time in crypto. The ecosystem that existed before the ban is gone. What’s emerging now is something entirely new—built on stablecoins, tokenized assets, and the particular brand of optimism that only comes from watching a $2 billion deal get signed.