Key Takeaways
Pakistan’s relationship with cryptocurrency has changed dramatically—and quickly.
Once firmly opposed to Bitcoin (BTC) and digital assets, the South Asian nation has spent the past two years quietly rewriting its stance as global attitudes toward crypto have shifted, particularly in the United States.
That evolution took a decisive step this week, when Pakistan signed an agreement with a company affiliated with World Liberty Financial (WLFI) to integrate its U.S. dollar–backed stablecoin, USD1, into its regulated payments system.
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The agreement, executed through SC Financial Technologies (an affiliate of WLFI), marks one of the first instances in which a decentralized finance (DeFi) firm linked to U.S. President Donald Trump has partnered directly with a sovereign state.
Signed on Jan. 9, the deal involves collaboration with the State Bank of Pakistan to integrate WLFI’s USD1 stablecoin into the country’s regulated digital payments framework.
Rather than operating in a gray zone, USD1 is expected to coexist alongside Pakistan’s emerging digital finance infrastructure under regulatory oversight.
WLFI CEO Zach Witkoff traveled to Islamabad for the announcement and met with senior officials, including Prime Minister Shehbaz Sharif, Field Marshal Asim Munir, Finance Minister Muhammad Aurangzeb, the chairman of the Securities and Exchange Commission, and the Governor of the State Bank.
“Our focus is to stay ahead of the curve by engaging with credible global players, understanding new financial models, and ensuring that innovation, where explored, is aligned with regulation, stability, and national interest,” Finance Minister Aurangzeb said.
At the center of the initiative is cross-border payments—especially remittances, which remain a lifeline for Pakistan’s economy.
Overseas Pakistanis send home more than $30 billion annually, much of it through costly and slow traditional banking channels.
Officials hope that using a regulated stablecoin could reduce fees, speed up settlement times, and improve transparency.
Pakistan is also moving in parallel on broader reforms, including drafting comprehensive virtual asset regulations and preparing pilots for its own central bank digital currency (CBDC).
Just a few years ago, such a partnership would have been unthinkable.
Pakistan had previously maintained a hardline stance against cryptocurrencies, citing financial stability risks and concerns.
Since then, the country has steadily softened its position, mirroring a broader global shift.
This is particularly true after the U.S. adopted a more crypto-friendly posture under the Trump administration.
Today, Pakistan is openly discussing initiatives ranging from regulated Bitcoin mining to establishing a national Bitcoin reserve.
The government has framed blockchain and digital assets not as speculative threats, but as tools for economic modernization and financial inclusion.
The timing of the WLFI agreement also reflects warming U.S.–Pakistan relations, though it has not been without controversy.
Regional observers, particularly in India, have raised questions about data security and geopolitical implications.
This is especially following a recent terrorist attack in Pahalgam that heightened regional tensions.
For Pakistan, the potential upside is significant.
Stablecoin integration could streamline remittances and expand access to digital finance for unbanked populations.
It can also attract foreign investment and technical talent.
Some policymakers have also suggested the development of Shariah-compliant blockchain products tailored to local needs.
Pakistan’s success with crypto will depend on strong regulatory safeguards, clear oversight, and the ability to navigate geopolitical sensitivities.
The nation’s bet on USD1 may prove to be an early test case for how sovereign states integrate stablecoins—not as speculative assets, but as regulated tools for everyday economic activity.