Pakistan's central bank is gearing up to launch a digital currency pilot program, marking a significant step towards modernizing its financial system. Here are the key developments :

- *Digital Currency Pilot*: The State Bank of Pakistan (SBP) plans to initiate a central bank digital currency (CBDC) pilot soon, aiming to join countries like India and Nigeria in CBDC trials.

- *Virtual Assets Act, 2025*: The government has passed the "Virtual Assets Act, 2025," which establishes an independent authority responsible for licensing and regulating the cryptocurrency industry. This new legislation introduces clear licensing and regulation for virtual assets.

- *Regulatory Framework*: The SBP is working with technology partners to develop its CBDC capabilities. The new regulatory framework includes a Shariah board and digital sandbox to oversee virtual asset firms.

- *Economic Stability*: Pakistan's central bank is also focused on maintaining economic stability, with its tight monetary policy reducing inflation from 38% to 3.2% in one year. The digital currency pilot is part of a broader effort to modernize the financial system, backed by a $7 billion IMF program.

- *Government Initiatives*: The government has launched initiatives to support blockchain and virtual asset adoption, with the SBP governor stating that the new legislation will help "lay down the foundations for the licensing and regulation" of the virtual assets sector.

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