In less than a year, Pakistan has gone from active aversion towards crypto to a wholehearted embrace. What does the fast pivot mean for the country?
Quietly, efficiently, and with very little fuss the Pakistani government has embraced crypto.
Up until March 2025 the stance of Pakistan’s financial regulators on crypto was clear: it was illegal, no framework to regulate it existed, and they were not interested in creating such a framework. Crypto was untraceable, analysts warned it could cause serious capital flight, economists worried it had been linked in other parts of the world to terror financing, and the State Bank of Pakistan (SBP) warned banks to cut crypto exchanges off from formal financial systems.
Even the mention of crypto in regulatory and government circles would elicit scoffs and groans. In less than a year that attitude has done a complete one-eighty.
Last week, Pakistan signed an agreement with an affiliate of World Liberty Financial, a crypto company linked to US President Donald Trump’s family, to explore a dollar-linked stablecoin for cross-border payments within a developing digital-payments framework. A month before this, Pakistan signed a memorandum of understanding with global crypto exchange Binance, signaling the government’s intent to explore tokenisation of up to $2 billion in sovereign bonds, treasury bills, and commodity reserves.
In parallel, regulators have given initial clearance to Binance and HTX, two of the world’s biggest crypto currency exchanges, to establish local subsidiaries, laying the groundwork for a regulated digital‑asset market. A third company is also planning an entry into the scene with plans to do more than establishing just a crypto exchange. The plans for them are grander with sights set on creating an ecosystem of products and services based on blockchain technology.
The shift might seem sudden, but it is a natural reaction to an opportunity. Pakistan already sits among the world’s most active crypto markets, a reality that policy has only recently begun to acknowledge. The country ranks third on the Chainalysis 2025 Crypto Adoption Index, trailing only India and the United States, and ranks second globally for retail – a measure that points to everyday, utility-driven usage rather than speculative spikes. This pattern matters. Crypto adoption in Pakistan is not confined to a narrow investor class; it is broad, decentralised, and grassroots, reflecting how digital assets are being used to navigate real frictions in the financial system, from access to dollars to cross-border payments.
This usage profile mirrors other high-adoption emerging markets, most notably Turkey, where prolonged currency volatility pushed millions of individuals and businesses toward crypto, especially stablecoins (crypto currency pegged to a global currency such as US dollar) as an alternative for value preservation and payments. Pakistan’s market shows similar dynamics. Estimates point to tens of millions of active users of crypto currencies, many operating outside formal banking rails but already comfortable with digital wallets, exchanges, and on-chain transfers. This activity has created a parallel financial layer, one that exists largely outside regulatory supervision but demonstrates clear product-market fit.
That is why it will be vital to follow how the trajectory of crypto adoption unfolds and what it will be used for. Understanding this topic is a complex game. Definitions of crypto currencies, stablecoins, and figuring out the blockchain mechanism can be a lot to digest. In this story we will try to define in the simplest and most relevant possible terms for our readers who might not be familiar with this subject. But before we get into the details, it is important to understand why crypto has become so relevant in Pakistan over the past few years.
From “hands off” to state-led rail-building
Pakistan’s crypto story officially starts in April 2018 with the first state acknowledgement of its existence. The State Bank of Pakistan (SBP) issued a circular in 2018, instructing banks and regulated payment institutions not to process or facilitate dealings in “virtual currencies/tokens,” effectively cutting crypto off from the formal financial system even as interest was rising online. That posture hardened through public warnings that no entity was licensed by SBP to offer remittances or related services using virtual currencies, and that cross-border value transfer via such means could trigger legal consequences. The result was not a clean “ban” as much as a choke point: crypto could exist in the shadows, but it could not easily touch regulated rails.
The year 2019 added a different kind of signal: not pro-crypto, but pro-innovation. The Securities and Exchange Commission of Pakistan (SECP) rolled out Regulatory Sandbox Guidelines (2019) a framework meant to let novel financial products be tested under supervision. It did not legalize crypto trading, but it hinted that Pakistan’s regulators were building the muscle memory to evaluate new financial tech rather than only swat it away.
By mid-2021, the gap between policy and reality was getting harder to ignore. Reuters described a boom in trading and mining activity, noting that while crypto was not straightforwardly “legal tender,” it also was not neatly eradicated. And that Pakistan’s AML context (including FATF pressure at the time) made regulation the central tension. January 2022 brought that tension into courtrooms: The SBP urged that cryptocurrency should be banned in filings tied to an ongoing case, citing risks like capital flight. Around the same period, Pakistan’s debate was increasingly defined by a single question: Is the state trying to stop crypto or trying to control the conditions under which it can exist?
The next year saw the pendulum swing back toward caution. Pakistani officials rejected legalization of crypto trading, pointing to terrorism-financing and money-laundering risks especially sensitive after Pakistan’s FATF trajectory. The message to the market was blunt: whatever adoption existed, it was not going to get a regulatory blessing yet.
The year 2025 flipped the script. In March 2025, the start of a more coordinated, state-led posture with the official launch of the Pakistan Crypto Council (PCC) under the finance apparatus, pitched as a platform to “regulate and integrate” blockchain and digital assets into the country’s financial landscape.
In May 2025 a political face was given to the shift: Prime Minister Shehbaz Sharif appointed Bilal bin Saqib as Special Assistant on blockchain and cryptocurrency with the status of minister of state. Within weeks, the government’s tone became unmistakably industrial-policy: Pakistan moved to channel surplus electricity toward bitcoin mining and AI data centers, including an allocation of 2,000 MW as part of a phased plan – less “should people trade crypto?” and more “how do we monetize infrastructure and attract capital?” SBP, for its part, publicly clarified the legal status of virtual assets while describing ongoing engagement with the PCC and the broader policy process signaling that the central bank was preparing a more formal architecture, not merely repeating the 2018 posture.
A month later, the true structural milestone came: Pakistan moved to create a dedicated regulator and approved the Virtual Assets Ordinance, 2025, establishing an independent authority to regulate cryptocurrencies and virtual assets. The Pakistan Virtual Assets Regulatory Authority (PVARA) frames itself as the licensing and supervisory body for virtual assets and VASPs (Virtual Assets Service Providers) under that ordinance. In parallel, Pakistan’s central bank began speaking in “CBDC language” with fewer caveats: SBP started preparing a digital currency pilot and finalizing legislation to regulate virtual assets, positioning this as modernization of payments and financial infrastructure rather than an ideological embrace of speculative trading.
By December 2025, Pakistan’s crypto push was not just domestic institution-building, it was outward-facing deal flow. An MoU with Binance to explore tokenization of up to $2 billion in sovereign assets, alongside regulatory steps for exchange licensing processes. And January 2026 brought a new frontier: Pakistan signed an agreement with an affiliate of World Liberty Financial, a crypto company linked to US President Donald Trump’s family, to explore a dollar-linked stablecoin for cross-border payments within a developing digital-payments framework. Taken as a timeline, Pakistan’s crypto “push” reads less like a sudden conversion and more like a multi-act pivot.
What tokenisation actually means
Tokenisation is often misunderstood as financial alchemy or speculative crypto activity. In reality, it is more mundane and more powerful. Tokenisation simply means placing traditional assets such as government bonds, commodities, warehouse receipts, even state‑owned assets onto blockchain rails. More precisely, it is the process of creating a digital token that represents a legally enforceable claim on a real‑world asset, recorded on a distributed ledger.
Tokenisation unlocks fractional ownership by transforming traditionally indivisible assets into digitally native units that can be owned, traded, and settled with precision. Instead of a bond or commodity being held by a single big owner or a small pool of large investors, tokenisation can legally map ownership rights onto millions of digital tokens, each representing a proportional share of the underlying asset.
These tokens are recorded on a distributed ledger, creating a single, tamper-resistant source of truth that updates ownership in real time and prevents duplication or double-selling.
A distributed ledger is a shared digital record of transactions that is maintained across multiple computers rather than being stored and controlled by a single central authority. Each participant in the network holds a synchronized copy of the ledger, and updates are added only when the network reaches agreement through defined consensus rules on which transactions are valid. This exactly is the manifestation of the blockchain technology. That data is stored, shared and validated on a network computer in a way that is decentralised, tamper resistant and verifiable without relying on a single authority.
Unlike traditional databases, where one institution owns the master record, a distributed ledger ensures that no single party can unilaterally alter history. Once a transaction is recorded, it becomes extremely difficult to change without the knowledge and agreement of the network. This design creates built-in transparency, auditability, and resilience, since the system does not depend on one central server or intermediary.
Crucially, the tokens are not mere representations; they embed enforceable rights such as income entitlement, redemption terms, and transfer restrictions through smart contracts. The result is a model of ownership that lowers entry barriers, enables instant settlement, improves liquidity, and allows assets like real estate and gold to be owned in fractions rather than wholes. By replacing paperwork-heavy, illiquid structures with digital, globally transferable instruments, tokenisation redefines who can participate in asset ownership and how capital itself moves.
Vugar Usi Zade, chief operating officer at MEXC, one of the largest cryptocurrency exchanges in the world explains that from a market microstructure perspective, liquidity improves when the number of participants and trading frequency increase. “Tokenization lowers minimum investment size, which increases the number of participants, while 24/7 on-chain trading increases the frequency.”
In practical terms, liquidity grows with participation and usage, and declines as transaction costs rise.
Vugar explains that the instant settlement feature of a tokenised asset reduces the days receivable close to zero, allowing small businesses to reinvest capital faster, pay suppliers on time, and reduce dependence on expensive short-term borrowing.
“For example, an SME exporting commodities or holding tokenized warehouse receipts could convert inventory into liquidity immediately instead of waiting several days for settlement. Even a 2-3 day reduction in settlement time can materially improve liquidity for businesses operating on thin margins,” says Vugar.
On ground, faster settlement lowers reliance on overdrafts and informal credit, where annualized financing costs can exceed 20-30%, explains Vugar. Tokenization, therefore, acts not only as a capital-market innovation but as a financial inclusion tool for entrepreneurs who are capital-constrained but asset-rich.
For instance, bonds and commodities are mostly accessible to banks, institutions, or wealthy investors. Tokenization, on the other hand, would allow smaller and fractional investments, which would consequently allow more retail investors, including Pakistanis living overseas, to participate.
In practice, this will play out at the level of day-to-day cash flow for a small business. Consider an SME exporting rice or cotton that stores its inventory in a warehouse. Under the traditional system, the warehouse issues a paper or digital receipt, which the exporter then submits to a bank to obtain financing against the inventory.
The bank must manually verify the document, confirm ownership, assess risk, and process the transaction, steps that often take days before funds are approved and released, if financing is approved at all. During this waiting period, the exporter still has to pay for transport, labor, utilities, and raw materials, often relying on short-term credit to bridge the gap.
With tokenised warehouse receipts, the same inventory is represented as a digital token issued at the moment the goods enter the warehouse. That token, which embeds details such as quantity, quality, location, and ownership, appears instantly in the exporter’s regulated wallet and can be sold, pledged, or financed on a licensed digital exchange or through a participating bank.
Because ownership and authenticity are already verified on the ledger, settlement can occur within minutes or the same day rather than several days later. For an SME operating on thin margins, completing the transaction quickly can materially improve liquidity, reducing dependence on costly short-term borrowing, enabling faster inventory turnover, and allowing the business to reinvest cash into production or new orders more efficiently.
On the tokenisation of government assets, consider the example of treasury bills. In Pakistan, the State Bank acts as the agent of the federal government for managing public debt and conducting auctions of government securities, including Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs).
These instruments are the primary way the government borrows from the domestic financial market to finance fiscal needs instead of direct borrowing from the central bank.
Pakistan’s government regularly holds auctions where banks and institutional investors submit bids to buy these securities, and the SBP accepts competitive and non-competitive bids based on yield criteria and auction targets. Accepted bids result in the transfer of funds from the buyer to the government, with repayment and yield defined by the auction’s weighted average rate.
After issuance, these securities are tradable in the secondary market through banks, allowing holders to sell before maturity, though prices can fluctuate with interest rates and demand. Commercial banks are the dominant holders because they often have surplus liquidity and view government papers as low-risk investments; investors wishing to participate typically do so through primary dealers or banking intermediaries, with holdings recorded in scriptless form via investor portfolio accounts. This system ensures liquidity for the government’s short-term financing while providing institutional buyers a risk-free asset, but the process involves multiple intermediaries, manual settlement conventions, and standard market cycles that can take days to settle fully.
In contrast, tokenisation aims to represent such assets or receivables as digital tokens on a distributed ledger, potentially allowing issuance, transfer, and settlement to occur more rapidly and without the layered intermediaries of auctions, custodial accounts, and traditional clearing and settlement systems. When everything is tokenised, everything happens on a decentralized exchange, however and this is where players like Binance and HTX come in.
Enter Binance and HTX
This is where the role of crypto currency exchanges becomes evident: it is all going to happen on the exchange but the exchanges could be involved in more than just providing a platform where transactions happen.
Both Binance and HTX have received an NOC from the Pakistan Virtual Assets Regulatory Authority to start exchange operations, with a third exchange also trying to enter the foray soon. As part of the regulatory process, both Binance and HTX will proceed with completing Anti-Money Laundering (AML) registration with the Government of Pakistan’s Financial Monitoring Unit (FMU) and establish a locally incorporated entity under the Companies Act, 2017. Once these steps are finalised, the company will submit its final application for a Virtual Asset Service Provider (VASP) license, paving the way for full operational authorisation and start exchange operations where trading will take place.
Before that, Binance and HTX will have a role in designing how to tokenize the assets that we are talking about. In the opinion of Jawad Ashraf, CEO of blockchain company Vanar, Binance and HTX do not “tokenize Pakistan’s assets” in the sense of owning the issuance; they sit on the market-infrastructure side of the equation.
“They can help Pakistan design a workable model, and, if licensed, become distribution and liquidity venues for whatever the state (and its regulated agencies) ultimately issues,” says Jawad.
Jawad explains that Binance’s role is the more explicit one right now as Pakistan’s Ministry of Finance has signed an MoU with Binance to evaluate tokenizing up to $2 billion in government-owned assets. Those are reported as sovereign bonds, treasury bills, and commodity reserves (oil, gas, metals).
That frames Binance primarily as an adviser or an implementation partner. The deal is to help define the token structure, issuance workflow, custody model, and investor access rails. And also, the operational plumbing needed for “real” distribution at scale.
“HTX, by contrast, shows up more as a “second exchange entrant” in the licensing track than as the named tokenization partner. Pakistan’s Virtual Assets Regulatory Authority (PVARA) has issued No Objection Certificates (NOCs) to both Binance and HTX. Yet, those NOCs are not operating licenses. They’re a controlled on-ramp: AML registration steps (including Pakistan’s goAML reporting framework), incorporation of local entities, preparation for full VASP license applications once the rules are finalized.”
Thus, HTX’s near-term role is about becoming eligible to operate under Pakistan’s oversight. This could later support trading, access, and liquidity for tokenized instruments, instead of shaping the tokenization blueprint itself.
Jawad explains that where this gets important is governance. If an exchange advises on token design and later becomes a major venue for trading it, Pakistan will want clean separation, transparent selection, and clear public accountability. “Exchanges can bring distribution power and operational maturity, but the “center of gravity” has to remain with the state’s legal framework, regulator-led supervision, and enforceable investor protections.”
Once licensed digital asset exchanges go live, they become the formal bridge between Pakistan’s existing and new crypto activity and the regulated financial system. Individuals who already hold cryptocurrencies, whether stablecoins, major digital assets, or tokens issued on approved blockchains, will be able to trade directly against other digital currencies within a supervised market structure.
A user holding say Bitcoins will be able to exchange them for other cryptocurrencies, or for tokenised real-world assets listed on the exchange, without exiting into cash. Market-based price discovery replaces bilateral negotiation. Trades are cleared and settled digitally, often within minutes, reducing risk and eliminating the multi-day settlement cycles common in traditional markets. As tokenised assets such as government securities or commodity-backed instruments are introduced, exchanges become the venue where digital currencies and real-world value intersect. What emerges is a unified marketplace in which cryptocurrencies are not isolated instruments, but interchangeable components of a broader digital financial system, connected by common rails and governed by a single regulatory framework.
It is against all this backdrop that initiatives such as the MoU between Pakistan and Binance and HTX for the tokenisation of up to $2 billion in state assets start making sense. Tokenisation is not being introduced into a vacuum; it is being layered onto an ecosystem where users and liquidity already exist. It just currently exists outside a regulated regime.
Regulated exchanges will become the venues where tokenised government assets, commodities, or receivables can be traded; compliant wallets become the holding layer; and on-chain settlement replaces multi-day clearing cycles. What emerges is a closed loop: grassroots crypto adoption provides demand and liquidity, exchanges provide price discovery and access, and tokenisation supplies real-world assets that anchor on-chain activity to the formal economy.
Binance and HTX did not respond to Profit’s request for comments.
How to make it successful?
Implementing tokenisation and building a regulated crypto market in Pakistan will be less of a technical challenge than a trust and incentives problem, and that distinction matters for policy design. A large share of existing crypto activity has grown precisely because it operates outside formal disclosure requirements. Users are accustomed to pseudonymity, informal peer-to-peer settlement, and minimal reporting, often as a response to weak trust in state institutions, unpredictable taxation, and concerns around retrospective enforcement. Moving this activity onto regulated rails will therefore face natural resistance, regardless of how sophisticated the underlying technology is.
One immediate challenge is income and asset disclosure. Tokenisation requires clear provenance: who owns the asset, where it originated, and how it is transferred. Regulated exchanges and wallets will be obligated to enforce KYC, transaction monitoring, and reporting standards. For users who have historically used crypto to avoid friction rather than to seek financial innovation, this shift can feel punitive. If disclosure requirements are perceived as abrupt or punitive, activity may simply remain offshore or informal, limiting the effectiveness of domestic exchanges and tokenised instruments.
Another risk lies in credibility of enforcement and policy continuity. Tokenised assets only work if participants trust that rules will remain stable across political and fiscal cycles. Sudden changes in tax treatment, capital controls, or reporting thresholds could undermine confidence just as markets begin to form. Without clear, forward-looking guidance especially on how digital asset gains, tokenised securities, and on-chain transactions will be treated, participants may hesitate to commit meaningful capital to regulated platforms.
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