Updated 20 Oct, 2025 07:56am
Digital rupee over crypto dollarisation?
Muazam Ali Tahir

As Pakistan gears up to regulate crypto and blockchain, with the creation of a United Arab Emirates-like Virtual Assets Regulatory Authority, a specific use case related to stablecoins — a unique form of digital currency — raises concerns. These concerns, amplified by recent stablecoin legislation adopted by the US, have also led the European Central Bank to fast-track its plans for a digital euro, according to a Financial Times report. Why? The threat of a local currency substitution, particularly dollarisation, in this case of increasingly popular stablecoins pegged to the dollar.
Humza Khan, Binance’s regional operations lead for the Middle East, North Africa and South Asia, said, “The main risks with stablecoin adoption in Pakistan relate to dollarisation and the potential impact on the country’s monetary policies.”
Mubariz Siddiqui, a legal expert and founder of Carbon Law, further added that the biggest issue that the central bank has is the “dollarisation of the economy”. Therefore, Pakistan now faces a critical policy question: can a central bank’s fiat digital currency provide resistance to this threat posed by centralised fiat-backed digital currencies to preserve the central bank’s authority and Pakistan’s monetary sovereignty?
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