Pakistan has taken a major step toward formalizing its crypto market. On April 14, 2026, the State Bank of Pakistan issued BPRD Circular Letter No. 10 of 2026, allowing licensed banks to open and maintain accounts for Virtual Asset Service Providers (VASPs) that hold either a valid No Objection Certificate or a full license from the Pakistan Virtual Assets Regulatory Authority (PVARA). The move replaces the April 2018 directive that had effectively blocked banks from handling transactions linked to virtual assets.
This policy shift sits on top of a broader legal overhaul. In March 2026, Pakistan’s Parliament passed the Virtual Assets Act, turning PVARA from a temporary presidential body into a permanent statutory regulator. For a country with an estimated 259 million people in mid-2026, the combination of a dedicated law, a formal regulator, and restored banking access marks a significant change in how the digital asset sector can operate.
What the new banking rules allow
The new circular does not give banks unrestricted exposure to crypto. It permits services only for PVARA-licensed or approved VASPs, and it comes with strict safeguards. Client crypto-related funds must be held in segregated accounts, separate from regular customer deposits. Banks are also prohibited from holding, trading, or investing in virtual assets using either their own balance sheets or customer funds. In addition, every VASP client must go through anti-money laundering and sanctions screening, with ongoing monitoring built into the bank’s compliance process.
In effect, Pakistan is adopting a controlled-access model. Regulated firms can enter the banking system, but only under active supervision. The article compares this structure to the UAE approach, where formal access is allowed only for licensed entities operating inside a defined regulatory perimeter.
Why the 2018 ban failed to eliminate demand
The 2018 banking restriction was designed to reduce fraud and limit capital flight, but the market did not disappear. Instead, activity shifted into peer-to-peer channels, informal hawala networks, and offshore exchanges. That created a weaker consumer protection environment and pushed a large share of transactions outside the regulated system.
The cost was especially visible in Pakistan’s freelancer economy. The article notes that about 2.3 million workers are registered with the Pakistan Software Export Board, while the broader freelancer population is estimated at more than 4 million. Many of these workers relied on costly and opaque workarounds to bring in dollar earnings. At the same time, Pakistan receives more than $30 billion a year in remittances, and a growing share of these flows reportedly moved through informal stablecoin channels instead of the banking sector.
Institutional backing behind the shift
The banking reversal is part of a wider institutional pivot. On December 12, 2025, Binance signed a letter of intent with Fauji Foundation, one of Pakistan’s largest institutional groups. The planned collaboration covers compliant market-structure advice, blockchain-enabled payment and operational pilots inside Fauji’s networks, and development within the PVARA framework. The signing included Binance CEO Richard Teng, PVARA Chairman Bilal Bin Saqib, and Changpeng Zhao in his role as adviser to the Pakistan Crypto Council, underscoring that the opening is being tied to established institutions rather than retail speculation.
Other agreements followed. In January 2026, the Government of Pakistan signed an MoU with SC Financial Technologies to explore the use of its USD1 stablecoin for cross-border payments. A separate non-binding MoU between Pakistan’s Ministry of Finance and Binance outlined the possible tokenization of up to $2 billion in sovereign assets, including bonds, treasury bills, and commodity reserves such as oil, gas, and metals. These projects depend on banks being able to hold fiat funds, process conversions, and support redemptions—exactly the functions now reopened under the new rules.
A large market already exists
According to PVARA Chairman Bilal Bin Saqib, speaking at Binance Blockchain Week in Dubai in December 2025, Pakistan already has an estimated 40 million crypto users and annual trading volume above $300 billion. Most of that activity has developed through informal channels over the past eight years, so formal banking access is unlikely to transform user behavior overnight. The local market is still heavily shaped by Telegram communities, WhatsApp groups, YouTube education, and short-form social media discovery.
The strongest real-world use cases remain remittances, inflation hedging, and long-term savings. Pakistan recorded a record $38.3 billion in worker remittances in FY25. Meanwhile, headline CPI inflation reached 38.0% year-on-year in May 2023, with rural CPI at 42.2%. Against that backdrop, dollar stablecoins, gold, and Bitcoin have increasingly been used as stores of value. Chainalysis ranked Pakistan 9th in global crypto adoption in 2024 and 3rd in 2025, reflecting the scale of demand already present in the market.
What comes next
The next phase will be judged by execution rather than legislation. Key signals include how quickly major Pakistani banks publish service terms for VASP clients, how many licenses PVARA issues over the next two quarters, whether Fauji Foundation pilots move into live welfare or payment infrastructure, and whether regulated stablecoin remittance corridors begin gaining measurable traction from the Gulf, the UK, and North America.
Overall, Pakistan is not simply “embracing crypto” in a broad sense. It is building a layered framework in which law, supervision, and banking access are being connected for the first time. For a market that spent years operating in legal and financial gray zones, that may prove to be the real turning point.