Pakistan to launch digital currency pilot

July 10, 2025 (MLN): As part of broader efforts to modernise the country’s financial architecture, the State Bank of Pakistan (SBP) is gearing up to launch a pilot for a central bank digital currency (CBDC) and is finalising new legislation aimed at regulating virtual assets, SBP Governor Jameel Ahmad said on Wednesday.

Central banks worldwide are increasingly exploring digital currencies amid rising global interest in blockchain-driven payment systems.

Pakistan’s push mirrors initiatives by regulators in China, India, Nigeria, and several Gulf nations that have either tested or begun issuing digital currencies through controlled pilots.

Speaking at the Reuters NEXT Asia summit in Singapore, Jameel Ahmad said Pakistan was actively “building up our capacity on the central bank digital currency” and aimed to initiate a pilot project in the near future.

He shared the stage with Sri Lanka’s central bank chief, P. Nandalal Weerasinghe, where both discussed monetary policy hurdles facing South Asia.

He noted that new legislation would establish the framework for licensing and regulating the virtual assets space, adding that the State Bank of Pakistan (SBP) was already in talks with technology partners. This follows Pakistan’s creation of the government-backed Pakistan Crypto Council (PCC) in March to promote virtual asset usage.

The PCC is assessing bitcoin mining potential using surplus energy, has appointed Binance founder Changpeng Zhao as a strategic adviser, and intends to set up a government-managed bitcoin reserve.

It has also held discussions with several U.S. crypto firms, including World Liberty Financial, which has links to former U.S. President Donald Trump.

In May, the SBP clarified that while virtual assets are not illegal in Pakistan, banks and other financial institutions were advised to refrain from engaging with them until a formal licensing regime is in place.

“There are certainly risks in this evolving space, but there are also substantial opportunities. We need to carefully weigh and manage these risks without missing out on the potential benefits,” Jameel Ahmad remarked during the panel.

Also on Wednesday, Pakistan’s state minister for blockchain and crypto, Bilal bin Saqib, announced that the government had passed the “Virtual Assets Act, 2025,” which establishes an independent regulator to oversee and license the crypto industry.

Jameel Ahmad further stated that the SBP would maintain a firm monetary stance to anchor inflation within its medium-term target of 5-7%.

Over the past year, Pakistan has lowered its benchmark rate from a peak of 22% to 11%, as inflation cooled sharply from 38% in May 2023 to 3.2% in June this year, with an average of 4.5% for fiscal 2025, marking a nine-year low.

“We are seeing the positive transmission of tight monetary policy, reflected both in inflation and improvements on the external account,” he said.

On currency risks, Jameel Ahmad downplayed concerns over dollar weakness, noting that most of Pakistan’s foreign obligations are in dollars, with only about 13% in Eurobonds or commercial borrowings.

“We don’t expect any significant impact,” he said, adding that the country’s foreign exchange reserves had climbed to $14.5 billion from under $3 billion two years ago.

Regarding Pakistan’s $7 billion, three-year IMF programme running through September 2027, he said it is progressing well, delivering reforms in fiscal management, energy pricing, and the foreign exchange regime. “We’re optimistic that after this programme, we may not need an immediate successor arrangement.”

To note, the Government of Pakistan has formally approved the “Virtual Assets Act, 2025,” following endorsements from the Federal Cabinet, the Prime Minister, and the President of Pakistan, said a press release issued by Office of the Special Assistant to PM/Minister of State on Blockchain and Crypto yesterday. 

The law establishes the Pakistan Virtual Asset Regulatory Authority (PVARA), an autonomous federal body empowered to license, regulate, and supervise entities dealing in virtual assets.

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