Pakistan Lifts 8-Year Crypto Banking Ban Following Trump Family, Binance Deals

Eight years after banning all banks from providing crypto services, Pakistan has officially greenlit the practice. In a letter issued this week, Pakistan’s central bank formally rescinded its prior crypto restrictions, which were based on a 2018 ban. This follows a new crypto regulatory law enacted last month.

Per the State Bank of Pakistan’s new rules, banks are now permitted to provide banking services to registered crypto firms. Banks will be responsible for monitoring their new crypto clients and ensuring they do not run afoul of money laundering or terrorism financing laws. The banks themselves will not, however, be allowed to trade, invest, or hold crypto, with either their own or customers’ money.

Pakistan’s pivot on crypto comes after the country has made significant inroads with some of the digital asset industry’s biggest players. In November, representatives from the Trump family-backed decentralized finance (DeFi) project World Liberty Financial (WLFI) traveled 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.

Then, in January, Pakistan’s Ministry of Finance 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. Pakistan has also signed an agreement with crypto exchange Binance—another firm with connections to the Trump family—that could see the nation tokenize some $2 billion in assets. Decrypt