The SBP is moving towards embracing digital currency, marking a shift in its previous cautious approach. This involves several key developments:
* Digital Currency Pilot Project: The SBP is gearing up to launch a digital currency pilot project. The aim is to modernize the country's financial system and align with global trends in blockchain-based payments.
* Approval of Virtual Assets Act 2025: The government has officially approved the "Virtual Assets Act 2025." This crucial legislation establishes the Pakistan Virtual Asset Regulatory Authority (PVARA), which will have the power to license, regulate, and oversee entities involved with virtual assets.
* Previous Stance vs. Current Position: Previously, the SBP maintained a cautious stance on virtual assets, advising financial institutions against dealing with them without a formal licensing framework. However, in May 2025, the SBP clarified that virtual assets are not illegal.
* Objectives and Benefits: This initiative aims to strengthen Pakistan's financial system, promote digital payments, and potentially bring virtual assets into the tax net. The SBP believes it will also help in preventing money laundering and terrorist financing.
* Potential for CBDC: The SBP is also exploring the possibility of issuing its own Central Bank Digital Currency (CBDC), potentially referred to as the "Digital Rupee." This would be a historic step towards a cashless, blockchain-based economy in Pakistan.
* Cautious Approach: The SBP has emphasized that it will proceed cautiously in this domain, learning from the experiences of other central banks worldwide.
In essence, the State Bank of Pakistan is now moving towards a clear and regulated framework for digital currencies and virtual assets, including plans to potentially introduce its own digital rupee.
