What changed, specifically
The following guest post was written by Farhan Haider (@iamFHG), Verse Community Member
The rescission letter does not hand banks an open mandate. It permits regulated banks to provide services to VASPs registered with PVARA, and it sets conditions. Client crypto funds must sit in segregated accounts, separated from standard client deposits. Banks themselves cannot hold, trade, or invest in virtual assets with their own balance sheet or with customer money. Every VASP client must be screened against AML and sanctions obligations, with ongoing monitoring tied to the bank’s existing compliance stack.
The scope is deliberately narrow. Only VASPs licensed under PVARA qualify for bank accounts, and the banks providing those services remain accountable for the conduct of their clients. Pakistan has chosen the same approach as the UAE: allow access, but only for licensed firms under active supervision.
Background: the 2018 ban and its cost
The 2018 prohibition cut banks off from any engagement with crypto firms or users. The intent was to contain fraud and capital flight. The outcome was different. Pakistani users did not stop trading. They moved to peer-to-peer channels, informal hawala networks, and offshore exchanges, often without recourse when disputes arose.
The country’s freelancer base, with roughly 2.3 million workers registered with the Pakistan Software Export Board and the wider pool estimated above 4 million, faced the worst of it. USD earnings reached their wallets through workarounds that were inefficient, expensive, and invisible to the tax system. Remittance corridors, which bring in more than $30 billion a year, saw a rising share move through stablecoins informally. The ban created the regulatory blind spot it was meant to prevent.
The institutional pivot: Binance and Fauji Foundation
On 12 December 2025, Binance signed a Letter of Intent with the Fauji Foundation at Foundation Headquarters in Rawalpindi. The LOI is non-binding, but the counterparties make it material. Fauji Foundation is one of Pakistan’s largest institutional operators, with holdings across energy, financial services, food production, and welfare programs serving millions of beneficiaries.
The scope of the collaboration covers three areas. Binance will advise on compliant market structure, drawing from its work in other jurisdictions. Fauji will pilot blockchain-enabled payment and operational infrastructure inside its own networks. Both sides commit to building within the PVARA framework rather than around it.
The signing ceremony featured Richard Teng, CEO of Binance, alongside Bilal Bin Saqib, Chairman of PVARA, and Changpeng Zhao, adviser to the Pakistan Crypto Council. Their presence carries a signal that goes past the paper. It tells the market that Pakistan’s opening will be anchored to institutions that already hold regulatory and political weight, not to speculative launches chasing retail volume.
Parallel deals and asset tokenization
The Binance LOI is one of several moves clustered around the new framework. In January 2026, the Government of Pakistan signed a memorandum of understanding with SC Financial Technologies, an affiliate of World Liberty Financial, the Trump family-linked crypto firm, to study the use of its USD1 stablecoin for cross-border payments alongside Pakistan’s own digital currency work. A separate, non-binding MoU between the Ministry of Finance and Binance, announced on 12 December 2025, scopes the tokenization of up to $2 billion in sovereign assets, including longer-term bonds, short-term treasury bills, and commodity reserves such as oil, gas, and metals recorded on the federal balance sheet.
These deals only work if banks can hold customer cash against tokenized instruments, process fiat conversions, and settle redemptions. That is what the rescission letter now allows, within the conditions set by the State Bank. The order matters: a regulator was set up, the law was passed, and banking access followed.
Market reality on the ground
Pakistan already hosts an estimated 40 million crypto users with annual trading volume above $300 billion, according to PVARA Chairman Bilal Bin Saqib at Binance Blockchain Week in Dubai in December 2025. Almost all of that activity runs through informal channels built over the last eight years, and formal banking access will not rewrite user behaviour on day one. Telegram hosts the most active trading and signal communities. YouTube carries the bulk of long-form education, usually in Urdu, with step-by-step walkthroughs of exchanges, wallets, and security basics. Instagram and TikTok Reels drive discovery. WhatsApp groups move information through freelancer circles and university networks. X hosts the more technical commentary but sits further from the median user.
Two implications follow. First, licensed VASPs entering the market will need to meet users where trust already exists, which means working with domestic creators rather than importing global playbooks. Second, the trust gap left by the ban will take time to close. Many users still associate the banking system with account freezes and unexplained blocks on crypto-linked transfers. The first visible cases of licensed banks processing VASP flows without incident will do more for adoption than any marketing spend.
The freelancer economy stands to benefit first. A compliant bank-to-VASP channel shortens the path from client payment to local currency, reduces fees, and creates a paper trail that supports tax filings. For students, small traders, and the creator economy, the same channel offers safer entry points than the informal networks that currently dominate.
Top use cases on the ground
Three use cases dominate actual demand in Pakistan, and each has measurable evidence behind it.
Remittances. Pakistan received a record $38.3 billion in workers’ remittances in FY25 (July 2024 to June 2025), according to the State Bank of Pakistan, up from $30.25 billion in FY24. Saudi Arabia, the UAE, and the UK together accounted for more than half of inflows. The World Bank’s Remittance Prices Worldwide Q4 2024 data continues to place the South Asia corridor above the G20 cost target of 3 percent, with smaller transfers often charged 5 to 7 percent. Stablecoin settlement, routed through a PVARA-licensed VASP with a bank account, can compress that cost to well under 1 percent and move funds in minutes. The Express Tribune estimates that shifting even half of annual remittance volume to regulated blockchain channels would retain an extra $1.5 billion to $2 billion for Pakistan every year.
Inflation hedge. Pakistan’s CPI inflation hit 38.0 percent year-on-year in May 2023, the highest print since the series began in July 1965, according to the Pakistan Bureau of Statistics. Rural CPI reached 42.2 percent in the same month and food inflation ran above 48 percent in urban areas. The rupee moved from roughly PKR 110 per USD in mid-2018 to above PKR 280 through 2024, a loss of more than 60 percent of its value, according to State Bank historical data. Households with savings have turned to assets that hold value outside the banking system. USD-denominated stablecoins such as USDT and USDC have absorbed a large share of that demand, visible in the Chainalysis Global Crypto Adoption Index, which ranked Pakistan 9th in 2024 and 3rd in 2025.
BTC and gold as store of value. Gold holds a cultural position in South Asia that few assets match. World Gold Council estimates place South Asian household gold holdings among the largest in the world, with Pakistani demand concentrated in jewellery and bars held as family savings. Bitcoin now sits in the same category for users under 35, treated as long-horizon savings rather than a trading instrument. Local exchange data and creator-led education content discuss BTC and XAU together as paired savings assets. A PVARA-licensed VASP working with a domestic institutional holder such as 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 sits alongside a small group of jurisdictions where a virtual assets law, a standalone regulator, and licensed bank access for VASPs all exist at the same time. The UAE built this combination through VARA in Dubai and ADGM in Abu Dhabi. Singapore’s MAS framework has shaped the ASEAN region. Malta retains its early-mover position in Europe.
What separates the Pakistani rollout is that an active regulator, a major institutional anchor in Fauji Foundation, and a workforce training track under the Binance LOI all arrived in the same year. Countries that got two of these right often stalled on the third. Banking access is the step that ties them together.
What to watch next
Four markers will tell us whether the framework works in practice. The first is the pace at which licensed banks publish service terms for VASP clients and sign the first accounts. The second is PVARA’s licensing throughput over the next two quarters, and how many of the applicants are domestic versus international. The third is the output of the Fauji pilots, particularly any deployment inside its welfare and payments operations, which would put blockchain infrastructure in front of a user base measured in the millions. The fourth is stablecoin activity on remittance corridors from the Gulf, the UK, and North America, where Pakistani workers send home the bulk of the country’s foreign exchange inflows.
A realistic near-term target: by Q4 2026, at least two top-five Pakistani banks have live VASP accounts, and licensed stablecoin corridors carry at least 1 percent of quarterly remittance volume, or roughly $100 million per quarter at current flows.
Farhan Haider is a Verse Community Member. Telegram: @iamFHG
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