KARACHI/SINGAPORE: Pakistan is preparing to launch a pilot project for its own digital currency as part of broader efforts to modernise its financial system, State Bank of Pakistan (SBP) Governor Jameel Ahmad announced on Wednesday.
Speaking at the Reuters NEXT Asia Summit in Singapore, Ahmad confirmed that the central bank is finalising legislation to regulate virtual assets and is in discussions with technology partners to support the initiative.
“We are building up our capacity on the SBP digital currency and hope to roll out a pilot soon,” Ahmad said during a panel discussion alongside Sri Lanka’s central bank governor, P. Nandalal Weerasinghe.
Pakistan joins a growing list of countries, including China, India, Nigeria, and several Gulf states, that are testing or issuing central bank digital currencies (CBDCs) through controlled pilot programmes amid rising global interest in blockchain-based payments.
The upcoming legislation will lay the groundwork for licensing and regulating Pakistan’s virtual asset sector, Ahmad said, adding that the central bank remains mindful of both the opportunities and risks in this emerging space.
Crypto Council Push and Presidential Assent
The move comes after President Asif Ali Zardari gave formal assent to the Virtual Assets Act, 2025. The law builds on initiatives spearheaded by the government-backed Pakistan Crypto Council (PCC), which was established in March to promote adoption of virtual assets.
The PCC is exploring projects such as bitcoin mining using surplus energy and establishing a state-run bitcoin reserve. Notably, Binance founder Changpeng Zhao has been appointed as a strategic adviser to the council. The PCC has also engaged in discussions with US-based crypto firms, including the Trump-linked World Liberty Financial.
In May, the SBP clarified that virtual assets are not illegal in Pakistan but advised financial institutions to refrain from engaging with them until a formal licensing framework is operational.
“There are risks associated, and at the same time, there are opportunities in this new emerging field. So we have to evaluate and manage the risks carefully, without missing out on the opportunity,” Ahmad said.
Record Remittances and Monetary Policy Outlook
Pakistan received a record $38.3 billion in remittances in FY25, providing crucial support for its external account. On the monetary policy front, the SBP governor reaffirmed that the central bank would maintain a tight policy stance to anchor inflation within its medium-term target of 5–7%.
The benchmark interest rate has been slashed from a peak of 22% to 11% over the past year, as inflation dropped sharply from 38% in May 2023 to 3.2% in June this year — the lowest in nine years.
“We are now seeing the results of this tight monetary policy, both on inflation and the external account,” Ahmad said.
He noted that Pakistan is not overly exposed to dollar weakness, pointing out that only 13% of the country’s foreign debt is made up of Eurobonds or commercial loans. Foreign reserves have grown to $14.5 billion, up from under $3 billion two years ago.
Ahmad expressed confidence in Pakistan’s current $7 billion IMF programme, which runs through September 2027, highlighting its role in driving reforms in fiscal policy, energy pricing, and the foreign exchange market.
“We are confident that after this (IMF programme), maybe we will not require an immediate follow-up,” he added.
When asked about potential financing for new military equipment imports, particularly from China, the governor said he was not aware of any such plans, stressing that the central bank’s mandate is to ensure smooth interbank market functioning and sufficient foreign exchange reserves to support trade financing.
