Pakistan Ends 8‑Year Bank Ban on Crypto, Allows VASP Accounts for 40 Million Users

Why It Matters

Integrating crypto firms into Pakistan’s regulated banking system could unlock a sizable pool of capital that has so far operated in the shadows. By providing a compliant conduit for 40 million investors, the policy may improve financial inclusion, increase tax revenues, and strengthen the country’s foreign‑exchange position. Moreover, the partnership with Binance signals a willingness to attract institutional crypto money, potentially positioning Pakistan as a regional hub for tokenised sovereign assets. The move also sets a precedent for other emerging markets grappling with crypto regulation. If Pakistan can balance strict AML oversight with a supportive banking environment, it may demonstrate a scalable model for harnessing crypto’s economic benefits while mitigating illicit‑finance risks.

Key Takeaways

• SBP lifts eight‑year ban on banks dealing with crypto, allowing licensed VASPs to open PKR‑denominated client‑money accounts.
• Regulation targets roughly 40 million Pakistanis (17% of population) already invested in crypto.
• Banks must verify PVARA licences, keep separate CMAs, and adhere to AML/CTF rules.
• Bilal bin Saqib (PVARA chair) says the framework will bring virtual assets into the formal financial system.
• Pakistan signs MoU with Binance to tokenise up to $2 billion of sovereign assets.

Pulse Analysis

Pakistan’s policy reversal reflects a broader shift among emerging economies from outright bans to regulated engagement with digital assets. The country’s large, youthful population has embraced crypto as a hedge against inflation and limited banking access, creating a de‑facto market that regulators can no longer ignore. By anchoring VASPs to the formal banking sector, the SBP is attempting to capture that demand within a transparent, tax‑able framework while preserving the integrity of its financial system.

Historically, Pakistan’s banking sector has been wary of crypto due to volatility and AML concerns. The new rules mitigate these fears by mandating separate client‑money accounts and rigorous licence verification, effectively compartmentalising crypto risk. This compartmentalisation mirrors approaches in jurisdictions like Japan and Switzerland, where clear segregation of crypto funds has facilitated institutional participation without destabilising the broader banking system.

The Binance tokenisation agreement could be the first test of the new regime’s capacity to handle large‑scale, blockchain‑based financial products. If successful, it may attract further sovereign‑grade tokenisation projects, positioning Pakistan as a pioneer in the region. However, the rollout will be challenged by banks’ readiness to implement AML controls for crypto transactions, the speed of PVARA’s licensing pipeline, and market participants’ confidence in regulatory consistency. The next six months will reveal whether the policy can translate regulatory intent into measurable inflows and a more resilient financial ecosystem.