Pakistan’s Central Bank Could Launch a Digital Currency by 2025
Some central banks around the globe are currently looking into the possibility of launching digital currencies. The Pakistan central bank is the latest to join this trend, with multiple reports claiming that they could launch a cryptocurrency by 2025. With a growing population of over 200 million, Pakistan is a huge reservoir of potential growth for the crypto space.
The State Bank of Pakistan (SBP) is exploring digital currency
The State Bank of Pakistan (SBP) is currently looking into the possibility of launching a central bank digital currency (CBDC), with the hope of introducing it by 2025. According to a report by media outlet Dawn earlier this week, the central bank deputy governor, Jameel Ahmad, revealed that they are currently working on the cryptocurrency concept to promote financial inclusion and reduce some of the inefficiency and corruption present in the government.
The central bank executive added that the SBP is working alongside the Federal Investigation Agency (FIA) to ensure that cybersecurity in the banking system the SBP is also aiming to make its services fully digitalized and technology equipped over the coming decade. Jameel revealed that the SPB is currently taking on specific initiatives that would transform it into a modern, digital, and fully technology-oriented apex bank and the introduction of the EMIs regulation was the first step towards achieving that feat.
He stated that “These landmark regulations are a testament of SBP’s commitment towards openness, adoption of technology and digitization of our financial system.” The SBP deputy governor added that Ahmad said, adding the regulations had been finalized, and they have the full support and commitment of the relevant stakeholders in the Fintech sector.
Pakistan launches regulations, licensing scheme for crypto companies
Earlier this week, the Pakistan government released its Electronic Money Institutions (EMIs) regulations after it received suggestions from the Financial Action Task Force (FATF). The EMIs are non-bank entities given license by the SPB to issue digital currencies for the purpose of e-payments.
According to the new framework, crypto and other financial companies in the country would have to meet specific criteria such as; capital requirement, security measures to protect investor funds, scrutiny of their executives, and the storage of customer details like ID, name, and other information.
The FATF, a global money laundering regulatory body, had previously issued warnings that cryptocurrencies do pose some risks such as money laundering and financing of terrorism.
Digitalization to favor the risk takers
As the central bank prepares to boost its digitization efforts, the country’s finance minister, Asad Umar, encouraged them to work alongside the FIA to boost cybersecurity in the financial sector as a failure in this aspect could have a long-lasting damaging effect to their system and the entire economy.
The minister made this remark while speaking at the launching ceremony of Electronic Money Institutions (EMIs). The finance minister pointed out that the Prime Minister believes digitalization is key to economic revolution and he is glad that the central bank has now taken crucial steps towards realizing that dream and reducing their dependence on human resources. Asad Umar pointed out that digitalization of their economy would help boost transparency, and resolve some of their core problems.
According to the finance minister, the digitalization of the Pakistan financial system would become beneficial to risk takers as it would boost creativity and innovation within the various sectors of the economy. Once that happens, Asad is convinced that a culture that would help bring fundamental transformation to the country will be adopted, allowing them to keep pace with the economic developments experienced in other parts of the world.
Pakistan is not one of the most popular cryptocurrency countries in the world, but its determination to regulate the industry could boost investor confidence in the emerging market.