On April 14, 2026, the State Bank of Pakistan (SBP) issued BPRD Circular No. 10 of 2026, officially allowing licensed banks to 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). The circular replaces the April 2018 directive that prohibited banks from processing any virtual asset-related transactions, ending an eight-year prohibition that had forced the country's crypto activity into informal channels.
What Changed Under the New Circular
The new framework is intentionally narrow. Only PVARA-licensed VASPs are eligible for banking services. Banks must hold clients' crypto assets in segregated accounts, separate from regular customer deposits. Banks themselves may not hold, trade, or invest in virtual assets — either on their own balance sheets or using client funds. All VASP clients must undergo anti-money laundering and sanctions compliance checks, linked to the bank's existing compliance systems. Banks providing these services remain responsible for their clients' conduct. Pakistan has adopted an approach similar to the UAE: granting access only to licensed firms under active supervision.
The circular builds on the Virtual Assets Act 2026, passed by parliament in March 2026, which transformed PVARA from a temporary presidential body into a permanent statutory regulator. Combined, the law, the regulator, and now bank access create a fully regulated operating environment in a country of roughly 259 million people — the world's fifth-largest by population.
The Cost of the 2018 Ban
The 2018 ban was intended to curb fraud and capital flight, but it had unintended consequences. Pakistani users did not stop trading crypto; they migrated to peer-to-peer channels, informal hawala networks, and offshore exchanges, often with no legal recourse in disputes. The country's freelancers — approximately 2.3 million registered with the Pakistan Software Export Board and an estimated total exceeding 4 million — bore the brunt. Their dollar-denominated earnings flowed back through inefficient, expensive, and tax-invisible channels.
Remittance corridors, which bring in over $30 billion annually, saw a growing share flowing informally via stablecoins. The ban created the very regulatory blind spot it aimed to prevent. By 2025, Pakistan had an estimated 40 million crypto users and annual trading volume exceeding $300 billion, according to PVARA Chairman Bilal Bin Saqib speaking at the Binance Blockchain Week in Dubai in December 2025.
Institutional Pivot: Binance and Fauji Foundation
On December 12, 2025, Binance signed a non-binding memorandum of understanding with the Fauji Foundation at the foundation's headquarters in Rawalpindi. The partnership covers three areas: advisory on compliant market structure; pilot deployment of blockchain-based payment and operational infrastructure within Fauji's networks; and a commitment to build within — not around — the PVARA framework. The signing ceremony included Binance CEO Richard Teng, PVARA Chairman Bilal Bin Saqib, and Changpeng Zhao in his capacity as advisor to the Pakistan Crypto Council. Their presence signaled to the market that Pakistan's opening would be tied to institutions with regulatory and political weight, not speculative retail launches.
Parallel to this, in January 2026, the Pakistani government signed an MoU with SC Financial Technologies, a subsidiary of the Trump-linked crypto firm World Liberty Financial, to explore the use of its $1 stablecoin for cross-border payments. A separate, non-binding MoU between the Ministry of Finance and Binance, announced December 12, 2025, targets the tokenization of up to $2 billion in state assets, including long-dated bonds, treasury bills, and commodity reserves such as oil, gas, and metals. These transactions depend on banks' ability to hold client cash against tokenized instruments, process fiat conversions, and settle redemptions — precisely what the new circular enables.
Primary Use Cases Driving Demand
Remittances: In fiscal year 2025 (July 2024 – June 2025), Pakistan received a record $38.3 billion in worker remittances, up from $30.25 billion in FY2024. Saudi Arabia, UAE, and the UK together accounted for over half the inflows. World Bank Q4 2024 data show the South Asia corridor still exceeds the G20's 3% cost target, with fees of 5–7% common for smaller transfers. Stablecoin settlement through a PVARA-licensed, bank-connected VASP could reduce that cost to well under 1% with settlement in minutes. The Express Tribune estimated that diverting even half of annual remittance volume to regulated blockchain channels would yield an additional $1.5–2 billion per year for Pakistan.
Inflation hedge: Pakistan's CPI hit 38.0% year-on-year in May 2023 — the highest since records began in 1965. Rural CPI reached 42.2% the same month, and urban food inflation exceeded 48%. The rupee depreciated from 110 PKR/USD in mid-2018 to over 280 PKR by 2024 — a loss of more than 60% according to State Bank historical data. Households with savings turned to assets that hold value outside the banking system, driving demand for dollar-denominated stablecoins like USDT and USDC. Chainalysis' Global Crypto Adoption Index ranked Pakistan 9th in 2024 and 3rd in 2025.
Bitcoin and gold: Gold holds a unique cultural position in South Asia, with household gold reserves among the world's largest — concentrated in jewelry and small bars held as family savings. Among users under 35, Bitcoin is now treated in the same category — as a long-term savings vehicle, not a trading instrument. Local exchange data and creator-led educational content frequently discuss BTC and gold as paired savings assets. A PVARA-licensed VASP, partnering with domestic institutional holders like Fauji Foundation or Pakistan Mint, could issue a tokenized gold product backed by audited reserves within 12 months of the first bank-VASP accounts going live.
Regional and Global Context
Pakistan now joins a small group of jurisdictions that simultaneously have a dedicated virtual assets law, an independent regulator, and licensed bank access for VASPs. The UAE established this combination through Dubai's VARA and Abu Dhabi's ADGM. Singapore's MAS framework has shaped the ASEAN region. Malta retains its first-mover status in Europe. What differentiates Pakistan's rollout is the convergence in a single year of an active regulator, significant institutional backing from Fauji Foundation, and capability-building programs under the Binance MoU. Other countries have achieved two out of three but stalled on the third. Bank access is the step that connects them.
What to Watch Going Forward
Four metrics will indicate whether the framework works in practice. First, the speed at which licensed banks publish VASP client terms and sign the first accounts. Second, PVARA's licensing throughput over the next two quarters, and how many applicants are domestic versus international. Third, results from Fauji's pilot programs — particularly any rollout within its welfare and payment operations that would expose millions of users to blockchain infrastructure. Fourth, stablecoin activity along remittance corridors from the Gulf, UK, and North America, where Pakistani workers send most of the country's foreign exchange earnings.
A realistic short-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 — approximately $100 million per quarter at current flow levels.