Pakistan has officially allowed banks to service registered VASPs, lifting a ban from 2018 — alongside multi-billion dollar deals involving the USD1 stablecoin and Binance.
Eight years after imposing a comprehensive ban on banking services related to crypto assets, Pakistan has officially reversed the policy. In a document issued this week, the State Bank of Pakistan lifted restrictions dating back to 2018, paving the way for domestic banks to provide services to legally registered virtual asset service providers (VASPs).
This move is consistent with the Virtual Property Act 2026, which was passed last month, the foundational legal framework that Pakistan has been developing for almost a year.
According to the new regulations, banks are allowed to open accounts and process transactions for VASPs, provided that the assets of these companies are completely segregated and not mixed with regular customer accounts.
Banks are also responsible for monitoring their cryptocurrency clients' compliance with anti-money laundering (AML) regulations. However, a clear line is drawn: banks themselves are prohibited from trading, investing in, or holding cryptocurrency in any form, whether with their own Capital or client deposits.
The Trump family's and Binance's imprint on the policy-changing journey.
Pakistan's shift did not occur in a policy vacuum. A few weeks after President Donald Trump returned to the White House, the head of World Liberty Financial, the Trump family's cryptocurrency firm, traveled to Islamabad to meet with the Pakistani Prime Minister. Shortly afterward, the Pakistani government issued an executive order initiating the process of building a national legal framework for digital assets.
Following the establishment of the regulatory body, Pakistan signed a memorandum of Mnemonics with World Liberty Financial, focusing on cross-border payments through a USD Peg stablecoin called USD1.
Simultaneously, Pakistan also signed an agreement with Binance, the world's largest cryptocurrency exchange, which also has ties to the Trump family, with the potential to Tokenize approximately $2 billion worth of domestic assets. This chain of partnerships demonstrates that Pakistan's opening up process is not simply a domestic policy decision, but is closely tied to actors reshaping the global cryptocurrency geopolitics in the post-US election period.
With a population of nearly 240 million and a relatively low rate of banking service usage, Pakistan represents a significant potential market for the digital asset ecosystem. Integrating the mainstream banking system into the cryptocurrency service chain , albeit on a limited scale, is expected to lay the groundwork for broader adoption in the world's fifth most populous nation.
