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Pakistan Lifts 8-Year Crypto Banking Ban Following Trump Family, Binance Deals
TL;DR
Pakistan has lifted an 8-year ban on crypto banking, allowing banks to serve registered crypto firms. This change follows partnerships with Binance and aims to boost digital asset adoption in the country.
Key points
- Pakistan lifted an 8-year ban on crypto banking
- Banks can serve registered crypto firms but cannot hold digital assets
- The policy aligns with the Virtual Assets Act of 2026
- Partnerships with Binance and World Liberty Financial influenced the decision
- Funds from VASPs must be kept separate from standard client accounts
Mentioned in this story
State Bank of PakistanBinanceWorld Liberty Financial
In brief
- Pakistan lifted an 8-year ban on crypto banking, allowing financial institutions to serve registered crypto firms.
- Banks can support crypto companies, but cannot trade or hold digital assets themselves.
- The shift follows partnerships with World Liberty Financial and Binance to expand crypto adoption in Pakistan.
Eight years after banning all banks from providing crypto services, Pakistan has officially greenlit the practice—a move poised to quickly facilitate the adoption of digital assets in the world’s fifth-most populous country.
In a letter issued this week, Pakistan’s central bank formally rescinded its prior crypto restrictions, which were instituted in 2018. The new pro-crypto policy is in line with the nation’s Virtual Assets Act of 2026, a regulatory framework for the industry that was enacted last month.
Per the State Bank of Pakistan’s new rules, banks are now permitted to provide banking services to registered crypto companies dubbed Virtual Asset Service Providers, or VASPs. VASP funds must be kept isolated—and not commingled—from the banks’ standard client accounts.
Banks will be responsible for monitoring their new crypto clients and ensuring they do not run afoul of Pakistani regulations related to money laundering prevention and risk protection.
The banks themselves will not, however, be allowed to trade, invest, or hold crypto, with either their own funds or customer deposits.
Pakistan’s pivot on crypto comes after the country has made significant inroads with some of the digital asset industry’s most powerful players, including the Trump family. Weeks after President Donald Trump’s return to power last year, leaders of his family’s crypto firm, World Liberty Financial, flew to Islamabad to meet with Pakistan’s prime minister.
Weeks later, Pakistan’s leadership issued an ordinance to begin the process of establishing a national crypto regulatory framework. After the regulator was spun up, the country signed a memorandum of understanding (MOU) with World Liberty Financial.
The partnership will involve the Trump family’s dollar-pegged stablecoin, USD1, and focus at least at first on cross-border payments.
Q&A
What does Pakistan's new crypto banking policy allow?
The new policy allows banks to provide services to registered crypto firms, known as Virtual Asset Service Providers (VASPs), but prohibits them from trading or holding digital assets.
Why did Pakistan lift its crypto banking ban now?
The ban was lifted following partnerships with World Liberty Financial and Binance, and in alignment with the recently enacted Virtual Assets Act of 2026.
How does the Virtual Assets Act of 2026 impact crypto in Pakistan?
The Virtual Assets Act of 2026 establishes a regulatory framework for the crypto industry in Pakistan, facilitating the adoption of digital assets and allowing banks to support VASPs.
