Pakistan is taking a significant leap towards financial modernization with its ambitious plans to launch a central bank digital currency (CBDC) pilot by the end of 2025, alongside introducing a rupee-backed stablecoin. This initiative, spearheaded by the State Bank of Pakistan (SBP) and guided by new regulations from the Pakistan Virtual Assets Regulatory Authority (PVARA), aims to boost financial inclusion and stimulate economic growth throughout the nation.
CBDC Development and Pilot Phase
The State Bank of Pakistan is gearing up for a groundbreaking trial phase of its central bank digital currency (CBDC), set to roll out in collaboration with Japanese blockchain firm, Soramitsu. By incorporating innovative technology, including an offline transaction capability, the CBDC aims to serve areas with limited internet access, marking a first in efforts to combat cash dependency in these regions. As Faisal Mazhar, Deputy Director of the Payment Department of the SBP, notes,
“This pilot will not only enhance digital accessibility but also address the practical challenges faced by millions in rural areas.”
Integrating the CBDC with the PRISM+ real-time settlement system is another crucial aspect of this initiative. This system is designed to improve liquidity management and enhance transaction transparency, marking a significant innovation for Pakistan’s banking sector. Initially targeting interbank settlements, the pilot could set a precedent that influences other central banks in South Asia, positioning Pakistan as a leader in the region’s financial revolution.
Regulatory Framework and PVARA
As part of its commitment to overseeing the budding digital economy, Pakistan recently established the Pakistan Virtual Assets Regulatory Authority (PVARA) under the Virtual Assets Ordinance, effective July 8, 2025. This independent regulatory body is tasked with licensing, regulating, and supervising virtual assets across Pakistan, ensuring that all entities comply with strict financial, legal, and security standards. Zafar Masud, Chairman of the Pakistan Banks Association, emphasizes the importance of this regulation, stating,
“Without a robust framework, we risk missing out on significant economic opportunities—up to $25 billion—due to delayed regulations.”
PVARA also features a Sharia Advisory Committee to ensure that virtual assets adhere to Islamic finance principles, catering to the unique needs of Pakistan’s majority Muslim population. Furthermore, a regulatory sandbox allows for controlled experimentation with emerging technologies under expert supervision, fostering innovation while maintaining integrity and security in the market.
Key Initiatives and Leadership
At the helm of these exciting developments is Bilal Bin Saqib, CEO of the Pakistan Crypto Council and Minister of State for Digital Assets. His vision to integrate blockchain technology harmonizes well with Pakistan’s strategic goals for digital transformation. With his impressive background in social innovation, Bin Saqib is uniquely positioned to lead these vital changes.
“Innovation in digital assets will fundamentally change our economy,”
he asserts, highlighting the transformative potential of these initiatives for everyday citizens.
The Pakistan Crypto Council has secured strategic advisory from Binance co-founder Changpeng Zhao, ensuring alignment of local policies with global practices. This collaboration is invaluable as Pakistan aims to partner with organizations like the World Bank and the International Monetary Fund (IMF) on the CBDC prototype, underlining its commitment to meeting international standards in the rapidly evolving digital asset landscape.
Goals and Expected Benefits
The overarching goals of Pakistan’s digital currency initiatives include reducing the costs associated with cash circulation and promoting financial inclusion, particularly among the underbanked rural population. By facilitating easy mobile transactions, the SBP’s CBDC aims to enhance security and transparency in financial transactions, thereby instilling greater trust in the system. Bin Saqib states,
“Empowering our citizens with digital financial tools will enhance their economic opportunities and contribute to national growth.”
As digital wallets gradually replace paper currency, the potential for modernization of Pakistan’s financial landscape becomes palpable. The government’s initiative not only aims to simplify everyday transactions but also to build a cashless society that aligns efficiently with the technological advancements of the 21st century, paving the way for a more connected and economically vibrant future.
A Vision for a Digital Future
Pakistan is embracing the digital age with open arms, positioning itself as a forward-thinking player in the global financial landscape. The ambitious rollout of its CBDC and the establishment of a robust regulatory framework signal a commitment to harnessing technology for the greater good. As the nation prepares for further steps towards digital transformation, financial experts and citizens alike are keenly watching the progress of these initiatives, hopeful that they will usher in a new era of financial access and opportunity.
