Evolution of Pakistans Approach to Cryptocurrencies: Planned Changes in Laws Regarding Their Recognition

Legal Framework for Recognizing Cryptocurrencies as an Official Form of Currency in Pakistan

The State Bank of South Asia (SBP) has proposed the introduction of a legal framework that would enable the recognition of digital assets, including cryptocurrencies, as official forms of currency. Once accepted, the plan would allow SBP to issue digital currency, potentially paving the way for the introduction of a central bank digital currency for Pakistan.

Shifting Attitudes Towards Cryptocurrencies by the State Bank of South Asia

This proposal also includes amendments to the SBP Act, signaling a shift in the country’s approach to cryptocurrencies. This is significant as it would mean the legal recognition of cryptocurrencies such as Bitcoin (BTC) as a means of payment, representing a substantial departure from SBP’s previous positions that issued warnings regarding virtual currencies.

Significance of Payment Instrument Status for Cryptocurrencies

Granting cryptocurrencies the status of a payment instrument means they are accepted as a form of payment for goods, services, and debts in Pakistan. The SBP proposal involves oversight over both physical and digital currencies, as well as the introduction of stricter penalties for unauthorized issuers of digital currencies.

Modernizing Pakistan’s Financial Landscape

This initiative aligns with the broader economic goals of the Pakistani government, which include GDP growth forecasts ranging from 2.5% to 3.5% and efforts to modernize the country’s financial landscape in the face of an increasingly digital financial world. The SBP legal framework would also open up the possibility for dual citizens to hold high positions in the central bank, marking a significant step towards liberalizing existing restrictions in this regard.