Pakistan Proposes Recognizing Digital Currency as Legal Tender

To integrate digital assets, such as cryptocurrencies, into Pakistan’s official financial system, the State Bank of Pakistan (SBP) has unveiled a daring plan. If this framework is accepted, digital currencies may be accepted as legal money, opening the door for the nation to adopt a central bank digital currency (CBDC).

A major policy shift towards digital assets is suggested by the SBP’s plan, which includes modifications to the State Bank of Pakistan Act. In a significant shift from the central bank’s prior position, which discouraged the use of virtual currencies, the new regulatory framework would allow digital currencies, like Bitcoin, to be used as legal tender for payments, according to the Tribune. Digital assets would be able to be utilized for debt repayment, products, and services because to this legal tender status, changing how people transact in Pakistan.

In addition, the SBP’s framework emphasizes digital currency management, positioning the central bank to regulate both physical and digital currency flows. This proposed oversight structure also outlines penalties for unauthorized digital currency issuers, aiming to ensure that only approved assets circulate within Pakistan’s economy.

Policy Overhaul Reflects Economic Modernization

The proposal aligns with Pakistan’s long-term economic goals, which include projected GDP growth of 2.5-3.5% and a drive towards financial modernization as global economies adopt digital finance solutions. The framework would also lift restrictions on dual nationals holding senior positions within the central bank, a move that could attract experienced professionals to contribute to Pakistan’s evolving financial sector.

SBP’s progressive stance on digital currencies could be a transformative step for the country, enhancing its financial infrastructure and keeping pace with the global digital finance movement. If implemented, this framework could make Pakistan one of the region’s first adopters of a CBDC, signaling a future-focused approach in Pakistan’s financial landscape.