Pakistan to Get CBDC by 2025, State Bank of Pakistan Commits to Adopt Blockchain Technology

The State Bank of Pakistan (SBP) will select and licence electronic money institutions to issue e-money to facilitate digital payments.

Pakistan to Get CBDC by 2025, State Bank of Pakistan Commits to Adopt Blockchain Technology

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In January, three sub-committees were set-up in Pakistan to examine tcrypto sector

Highlights
  • Pakistan’s CBDC development is currently underway
  • The name of Pakistan’s CBDC remains awaited
  • Pakistan is among other Asian nations like India, China in testing CBDC
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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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Further reading: Cryptocurrency, CBDC, Pakistan
Radhika Parashar
Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More
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