The State Bank of Pakistan (SBP) issued BPRD Circular No. 10 of 2026 on April 14, 2026, effectively ending the eight-year-old blanket ban on banks engaging with cryptocurrency-related businesses. Under the new rules, licensed banks may open and maintain accounts for Virtual Asset Service Providers (VASPs) that hold a valid no-objection certificate or full license from the Pakistan Virtual Assets Regulatory Authority (PVARA).
What Specifically Changed
The circular does not grant banks an open mandate. It allows regulated banks to offer services to PVARA-registered VASPs under strict conditions. Customer crypto assets must be held in segregated accounts, separate from regular deposits. Banks themselves may not hold, trade, or invest in virtual assets on their own balance sheets or with client funds. Every VASP client must be screened for anti-money laundering and sanctions compliance, with ongoing monitoring tied to the bank's existing compliance system.
This replaces the April 2018 directive that prohibited banks from processing any virtual asset-related transactions. The change builds on the Virtual Assets Act 2026, passed by parliament in March 2026, which transformed PVARA from an interim presidential body into a permanent statutory regulator.
Background: The 2018 Ban and Its Costs
The 2018 ban prevented banks from any engagement with crypto firms or users. The result was a massive shift to peer-to-peer channels, informal hawala networks, and offshore exchanges, leaving users with little recourse in disputes. Pakistan's freelancer community — estimated at over 4 million people — bore the brunt, receiving dollar earnings through inefficient, costly, and tax-invisible channels. Remittance channels, which brought in over $30 billion annually, saw an increasing share of informal stablecoin flows. The ban created precisely the regulatory blind spot it was meant to prevent.
The Institutional Pivot: Binance and Fauji Foundation
On December 12, 2025, Binance signed a non-binding letter of intent with the Fauji Foundation at the foundation's Rawalpindi headquarters. Fauji Foundation is one of Pakistan's largest institutional players, with interests in energy, financial services, food production, and social programs serving millions of beneficiaries.
The collaboration covers three areas: Binance advising on compliant market structure; Fauji piloting blockchain-based payment and operational infrastructure; and both parties committing to build within the PVARA framework, not around it. The signing ceremony featured Binance CEO Richard Teng, PVARA Chairman Bilal Bin Saqib, and Changpeng Zhao as advisor to the Pakistan Crypto Council — signaling that Pakistan's opening would be tied to institutions with regulatory and political weight.
Parallel Deals: Stablecoins and Asset Tokenization
In January 2026, the government signed a letter of intent with SC Financial Technologies, a subsidiary of Trump family-linked World Liberty Financial, to study use of its $1 stablecoin for cross-border payments. Separately, a non-binding LOI between the Ministry of Finance and Binance aims to tokenize up to $2 billion of state assets, including long-term bonds, short-term treasury bills, and commodity reserves such as oil, gas, and metals.
These transactions require banks to hold client cash against tokenized instruments, process fiat conversions, and settle redemptions — exactly what the new circular now enables.
Market Reality: 40 Million Users and $300B+ Annual Volume
PVARA Chairman Bilal Bin Saqib stated at Binance Blockchain Week in Dubai in December 2025 that Pakistan already has an estimated 40 million crypto users and annual trading volume exceeding $300 billion. This activity has occurred almost entirely through informal channels built over eight years. Telegram hosts the most active trading and signal communities; YouTube carries Urdu-language educational content; Instagram and TikTok Reels drive discovery; WhatsApp groups spread information among freelancers and university networks.
Compliant VASPs entering the market will need to meet users where trust already exists — meaning partnering with local creators rather than importing global strategies. The first visible cases of authorized banks processing VASP flows without incidents will do more for adoption than any marketing spend.
Key Use Cases: Remittances, Inflation Hedge, and Store of Value
Remittances. Pakistan received a record $38.3 billion in worker remittances in fiscal 2025 (July 2024–June 2025), up from $30.25 billion in fiscal 2024. South Asian corridor remittance costs remain at 5–7% for small transfers, well above the G20's 3% target. Stablecoin settlement through a PVARA-licensed VASP with a bank account could cut costs to under 1% and settle funds in minutes. Redirecting half of annual remittance flows to regulated blockchain channels could add $1.5–2 billion per year for Pakistan, according to The Express Tribune.
Inflation hedge. Pakistan's CPI hit 38% year-on-year in May 2023, the highest since the series began in 1965. The rupee depreciated from 110 PKR/USD in mid-2018 to over 280 PKR by 2024 — a loss of more than 60%. Households with savings turned to assets that retain value outside the banking system. USD-denominated stablecoins like USDT and USDC absorbed much of this demand, reflected in Chainalysis' Global Crypto Adoption Index ranking Pakistan 9th in 2024 and 3rd in 2025.
Bitcoin and gold as store of value. Gold holds a cultural position in South Asia; the World Gold Council estimates household gold holdings in the region are among the world's largest. Among users under 35, Bitcoin now occupies the same category — treated as long-term savings rather than trading vehicles. A PVARA-licensed VASP partnering with domestic institutions like Fauji Foundation could issue a tokenized gold product backed by audited reserves within 12 months of the first bank-VASP accounts going live.
Regional Context and Future Outlook
Pakistan now joins a select group of jurisdictions that simultaneously have a virtual assets law, a dedicated regulator, and licensed bank access for VASPs — alongside the UAE (Dubai VARA and Abu Dhabi ADGM), Singapore (MAS framework), and Malta. What distinguishes Pakistan's rollout is that the regulator, institutional backing from Fauji Foundation, and workforce training under the Binance LOI all emerged in the same year.
Four indicators will determine whether the framework works in practice: the pace at which licensed banks publish VASP account terms; PVARA's licensing throughput in the next two quarters; results of Fauji's pilot programs, particularly any rollout touching millions of users; and stablecoin activity on remittance corridors from the Gulf, UK, and North America. A realistic near-term target: by Q4 2026, at least two of Pakistan's top five banks have active VASP accounts, and regulated stablecoin corridors process at least 1% of quarterly remittance volume — roughly $100 million per quarter at current flows.