Pakistan’s Central Bank Takes Cautious Approach Towards CBDC as Global Adoption Accelerates

In order to keep pace with the rapidly evolving landscape of digital currencies, the State Bank of Pakistan (SBP) recently announced its interest in developing a Central Bank Digital Currency (CBDC). While the prospect of introducing a CBDC in the near future is on the table, the central bank said it will “proceed with caution” and aims to learn from other nations and their experience with CBDCs.

SBP Governor, Jameel Ahmad, highlighted the urgency of accelerating CBDC development in the coming months. If all goes as planned, he said that a CBDC could potentially be made available for public use by the end of 2025.

Pakistan’s interest in CBDCs dates back to 2019 when the SBP proposed a bill outlining the foundation for a CBDC. At the time, the primary objective was to introduce a digital version of the national currency to counteract the proliferation of digital currencies and the potential threat of dollarization on the country’s economy.

Senator Saleem Mandviwalla, Chair of the Senate Standing Committee on Finance and Revenue, believes that the implementation of digital currencies and a CBDC can coexist harmoniously within the financial system. Encouraging a dialogue around digital innovations, Mandviwalla is optimistic about the potential benefits these advancements could bring.

See Also

Examiner’s report reveals Celsius failed to report hundreds of millions of dollars worth of losses

As the SBP closely monitors the progress of other nations’ CBDC initiatives, India’s experiments with retail and wholesale CBDCs serve as a noteworthy case study. India has dismissed the notion of a blanket ban on virtual currencies and, like Pakistan, is eager to explore the use of CBDCs for cross-border transactions and the facilitation of remittances.

There’s recently been a marked increase in governments’ interest in CBDCs. The Bank for International Settlements revealed that 18% of central banks plan to launch a CBDC in the “near term”. Yesterday, Russian President Putin signed a bill into law that would allow the government to begin implementation of a digital ruble as soon as August of this year.