Pakistan is accelerating efforts to roll-out its CBDC in the next two years. The country's central bank, the State Bank of Pakistan (SBP), has decided to select and licence electronic money institutions (EMIs) to issue e-money to facilitate digital payments. A CBDC (central bank digital currency) is the digital representation of a fiat currency, that is supported on the blockchain technology, making transaction records unchangeable and transparent. The country had reportedly set up three sub-committees in January to examine the crypto sector from all angles before the nation finalises its stance on crypto legalisation.
The Pakistan government has spelled out two rules for EMIs, that have been formulated with the help of the World Bank. The rules require EMIs to disclose their safety measures, anti-money laundering provisions, and compliance activities with the law enforcement agencies before entering the country's CBDC ecosystem.
The development was confirmed by Asad Umar, the Finance Minister of Pakistan. He reportedly noted that dabbling in the growing blockchain sector will empower the country's trade and commerce industries, while bringing its fintech sector in competition with other nations.
The SBP has called Pakistan's initiative to test its CBDC a ‘testament' to the nation's openness towards newer technologies.
“These landmark regulations are a testament of the SBP's commitment toward openness, adoption of technology and digitisation of our financial system,” Pakistan's Arab News quoted Jameel Ahmad, Deputy Governor of SBP as saying.
In January this year, three sub-committees were set-up in Pakistan to examine the crypto sector from all angles before the nation finalises its stance on crypto legalisation, local media had reported at the time.
India and Pakistan are both trying to draft rules around the crypto sector while ramping up the development of their respective CBDCs.
Amid the legal uncertainties, India and Pakistan, that were the second and third highest adopters of cryptocurrency globally, respectively have fallen to fourth and sixth ranks, respectively, a Chainalysis report had said in September.
The central banks of both nations favoured bans on the crypto sector, but are currently active participants in formulating their respective crypto laws.
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