Crypto in Pakistan 2026: Third in Global Adoption, Eight Years of Banking Ban Lifted, and the Virtual Assets Act Finally Passed

TL;DR: Pakistan ranked third globally in crypto adoption in 2025, trailing only India and the United States, with an estimated 27 million active crypto users in a country of 240 million people. This happened while the State Bank of Pakistan maintained an eight-year banking ban on crypto transactions. In 2026, Pakistan executed one of the most dramatic policy reversals in Asian financial history. Parliament passed the Virtual Assets Act 2026 in March, creating PVARA (Pakistan Virtual Assets Regulatory Authority) as a permanent independent regulator. The SBP formally lifted its banking ban through BPRD Circular Letter No. 10 issued April 14, 2026, ending restrictions that had been in place since 2018. The Pakistan Crypto Council, established March 2025 and led by CEO Bilal Bin Saqib with Binance founder Changpeng Zhao (CZ) as strategic advisor, coordinated the policy shift across government agencies. Pakistan has also issued no-objection certificates to major global exchanges, is exploring a Strategic Bitcoin Reserve, plans to tokenize up to $2 billion in government assets, and has allocated surplus electricity for Bitcoin mining. MediaCrypto note: Pakistan in 2026 is the most dramatic example of a country going from crypto prohibition to pro-crypto government strategy in a single year. The speed of the reversal, from SBP ban to Strategic Bitcoin Reserve proposal in twelve months, is unprecedented globally.

Pakistan's crypto story requires understanding a specific paradox first: the country ranked third in the world for crypto adoption while its central bank maintained an official ban on crypto banking transactions. This was not a contradiction of the data. It was the data accurately describing what happened when 27 million Pakistanis used crypto anyway, through P2P platforms, informal exchanges, and direct wallet-to-wallet transactions that bypassed the banking system entirely.

Pakistan did not ban crypto ownership. It banned banks from participating in crypto transactions. The distinction created exactly the same dynamic seen in Nigeria, Argentina, and Vietnam during their respective banking restriction periods: prohibition does not eliminate crypto use, it redirects it away from the formal financial system and into peer-to-peer infrastructure that generates no tax revenue and no regulatory visibility.

The Eight-Year Banking Ban: What It Was and What It Actually Did

The State Bank of Pakistan's 2018 circular instructed all banks and payment service companies to refrain from processing, using, trading, holding, transferring value, promoting, and investing in virtual currencies. This was one of the most comprehensive banking exclusions of crypto in any major Asian economy, going further than India's (subsequently overturned) bank ban by covering payment service companies alongside traditional banks.

The practical consequence for ordinary Pakistanis wanting to buy Bitcoin or USDT was that they could not deposit money into an exchange through a bank transfer. Exchanges could not hold Pakistani bank accounts for fiat on-ramping. The banking system was entirely excluded from the crypto ecosystem.

What emerged instead was a large, active, entirely informal crypto market. Pakistanis traded through Binance's P2P platform, exchanging rupees for USDT through direct person-to-person transactions that transferred rupees through personal bank accounts (not to exchange corporate accounts, which would have triggered the ban). Local OTC desks operated informally. The volumes were substantial enough to place Pakistan third globally in adoption despite operating completely outside the formal financial system.

The cost of this informal structure was the same as in every other jurisdiction that chose prohibition over regulation: no consumer protection, no dispute resolution, no tax visibility, and no ability to attract international exchanges that require compliant banking relationships. Pakistan's government estimated it had foregone at least $200 million in tax revenue from the unregulated crypto sector over the ban period.

The Pakistan Crypto Council and the CZ Factor

The turning point came in March 2025, when Pakistan established the Pakistan Crypto Council (PCC) with a mandate to develop a comprehensive regulatory framework. The PCC's most notable appointment was Changpeng Zhao, the founder of Binance, as strategic advisor. CZ's involvement was not symbolic: he met with Pakistani government officials, participated in policy discussions, and brought Binance's global regulatory experience to bear on the framework design.

The PCC was led by CEO Bilal Bin Saqib and coordinated across the State Bank of Pakistan, the Securities and Exchange Commission of Pakistan (SECP), the Federal Board of Revenue (FBR), and the Digital Pakistan Authority. This whole-of-government coordination, bringing together the banking regulator, securities regulator, tax authority, and digital economy ministry under one council, was itself a signal of the seriousness of the policy shift.

By July 2025, the government issued the Virtual Assets Ordinance 2025, establishing PVARA on a temporary basis through executive authority. The Ordinance defined virtual assets, created the licensing framework, and established PVARA's 11-member board structure.

The Virtual Assets Act 2026: Permanent Law

Parliament passed the Virtual Assets Act 2026 in March 2026, converting the temporary Ordinance into permanent legislation and giving PVARA statutory authority rather than executive-order authority. This is a significant distinction: a statutory regulator is harder to reverse with a change of government than an executive-ordered one, and international exchanges require statutory regulatory frameworks before committing to a market.

PVARA's 11-member board includes the SBP Governor, heads of SECP, FBR, and the Digital Pakistan Authority, key federal secretaries, the FIA Director General, and two independent directors. This composition makes PVARA a whole-of-government oversight body rather than a single-ministry operation, giving it authority that cuts across the jurisdictions that previously created regulatory confusion.

Under the Virtual Assets Act, virtual assets are defined as digital representations of value that can be traded, transferred, and used for payment or investment, while explicitly not being legal tender. All virtual asset service providers must register with PVARA and comply with AML/CFT requirements aligned with FATF recommendations. The Act restricts stablecoins to those backed 100 percent by fiat or approved assets with licensing and reserve requirements, a design that prevents algorithmic stablecoin issuance under Pakistani law.

The SBP Banking Ban Lifted: April 14, 2026

The most operationally significant development came on April 14, 2026, when the SBP issued BPRD Circular Letter No. 10, formally ending its 2018 banking ban. Banks are now permitted to provide services to PVARA-licensed virtual asset service providers, subject to standard AML and KYC requirements.

The SBP's new rules are specific about what banks can and cannot do. Banks may facilitate rupee transactions for PVARA-licensed VASPs. Funds cannot be used as loan collateral. Banks themselves cannot invest in, trade, or hold crypto using their own funds or customer deposits. Suspicious transactions must be reported under AML law. The circular essentially opens the banking system to compliant crypto businesses while keeping banks themselves away from direct crypto exposure.

Pakistan's Ambitious Digital Asset Strategy

Beyond the regulatory framework, Pakistan has announced several initiatives that place it among the most forward-leaning governments on crypto globally. The government has issued no-objection certificates to major global exchanges, creating a pathway for international platforms to serve Pakistani users through compliant channels. A proposal to allocate surplus electricity for Bitcoin mining and AI data centers reflects the same logic that Russia applied in legalizing mining as a strategic export industry. Pakistan has significant surplus electricity capacity from hydroelectric and other sources that currently generates no foreign currency income.

The exploration of tokenizing up to $2 billion in government assets for international capital raising reflects the real-world asset tokenization trend that BlackRock and others are driving in developed markets. Pakistan is considering applying the same technology to government infrastructure as a capital raising mechanism. A dollar-linked stablecoin pilot for remittances targets the substantial Pakistani diaspora remittance corridor, where USDT has already become a significant informal transfer channel. A CBDC pilot is in preparation. Bill No. 13356 in the Verkhovna Rada proposes a Strategic Bitcoin Reserve, and Pakistani officials have floated an equivalent proposal.

About the Author

This article was researched and written by the MediaCrypto editorial team. MediaCrypto is a cryptocurrency news and market analysis publication covering Bitcoin, Ethereum, altcoins, regulatory developments, and market trends. Follow us on X at @MediaCrypto_AI and on Instagram.

FAQ — Crypto in Pakistan 2026

Is crypto legal in Pakistan? Yes. The Virtual Assets Act 2026, passed in March, formally legalized and regulated crypto in Pakistan. Crypto is not legal tender. All VASPs must register with PVARA. The SBP lifted its banking ban through BPRD Circular Letter No. 10 on April 14, 2026, permitting banks to serve PVARA-licensed crypto firms.

How many crypto users does Pakistan have? Pakistan has an estimated 27 million active crypto users, representing approximately 11 percent of the population. Despite this, Pakistan ranked third globally in crypto adoption in 2025 according to Chainalysis, trailing only India and the United States.

What is PVARA? PVARA is the Pakistan Virtual Assets Regulatory Authority, established under the Virtual Assets Ordinance 2025 and made permanent by the Virtual Assets Act 2026. Its 11-member board includes the SBP Governor, SECP head, FBR head, and Digital Pakistan Authority head, making it a whole-of-government oversight body for all virtual asset service providers.

Why is CZ advising Pakistan's crypto council? Changpeng Zhao (CZ), Binance's founder, was appointed as strategic advisor to the Pakistan Crypto Council (PCC) in 2025. His involvement brought Binance's global regulatory experience to Pakistan's framework development and signaled to the international crypto industry that Pakistan was serious about building a credible regulatory environment.

What are Pakistan's Bitcoin mining plans? Pakistan has announced plans to allocate surplus electricity for Bitcoin mining and AI data centers, treating mining as a strategic export industry that generates foreign currency income from otherwise underutilized energy capacity, similar to approaches taken by Russia and El Salvador.

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Read also: Crypto in India 2026 — https://mediacrypto.ai/news/crypto-in-india-2026-39-million-users-30-percent-tax-and-a-central-bank-that-sti

Read also: Crypto in Turkey 2026 — https://mediacrypto.ai/news/crypto-in-turkey-2026-200-billion-in-annual-volume-a-10-percent-proposed-tax-and

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