PAKISTAN has taken another step forward in its efforts to modernise the country’s financial sector with the help of blockchain and cryptocurrency technologies. On Friday, the authorities gave initial approval to major global cryptocurrency exchanges Binance and HTX to register with regulators and set up local subsidiaries. According to the Pakistan Virtual Assets Regulatory Authority, the approvals were given after it was satisfied regarding the governance and compliance protocols of both exchanges. Once the local subsidiaries are set up, the exchanges can apply for a full licence to operate in the country. In other words, Pakistanis could finally have access to a state-recognised medium for trading in cryptocurrencies and digital assets. In view of the risks associated with crypto trading, Pakistan has required these exchanges to also register with its anti-money laundering system. Separately, the finance ministry also signed an MoU with Binance to explore the use of new financial technologies in its capital markets. “The MoU establishes a framework for exploring potential collaboration on the tokenisation and blockchain-based distribution of Pakistan’s real-world and sovereign assets, including government bonds, treasury bills, commodity reserves and other federally owned assets,” according to a news report.

In simple words, converting ‘real-world assets’ like bonds and treasury bills into digital assets can allow retail investors in the crypto space to also invest in such assets, opening up a new market for government securities. The initiative may involve the digitisation of up to $2bn in assets “with the objective of enhancing liquidity, transparency and access to international markets”, according to the finance ministry. Under the MoU, Binance is expected to provide technical expertise, advisory support and training as well. While Pakistan’s great leap forward in crypto technologies has yet to make its landing, it appears that the authorities are proceeding with the necessary caution. How the registration process for these two exchanges unfolds will be closely watched, and once they become operational, Pakistan can expect more scrutiny of how it regulates the exchanges and manages the risks of dealing in crypto. If done well, it could prove an opportunity to raise new revenues from what has so far been a grey market. If mishandled, these mediums could end up facilitating capital flight and invite FATF scrutiny. Therefore, the authorities must manage this initiative responsibly.

Published in Dawn, December 14th, 2025