Pakistan is reportedly planning to carry out studies in order to potentially launch a State-backed virtual currency so that it can enhance its existing banking system, enable greater financial inclusion, and also ensure that illicit activtiies such as money laundering are not being carried out by local or foreign entities.
Pakistan‘s digital currency will aim to provide more transparency by more accurately keeping track of monetary transactions. The nation’s Pakistan Tehreek-e-Insaf (PTI) government is focused on combating corruption while providing more accessible financial services to locals.
The State Bank of Pakistan (SBP), the nation’s central bank, stated that they’re “studying” digital currencies “very carefully.”
SBP Reza Baqir spoke to CNN correspondents earlier this month. He pointed out that the benefit of virtual currency is that it will give another boost to their efforts to promote financial inclusion. A central bank digital currency (CBDC) will also allow Pakistan to make more progress in its fight against money laundering and terrorism financing, the Governor added.
He also mentioned that they’re hoping to make an announcement regarding the development of a CBDC in the coming months. For now, however, they’re supporting a digital banking framework for local consumers and businesses.
The digital currency will not actually be replacing physical currency and coins, at least not right away. Paper currency may be difficult to replace considering Pakistan’s economy is heavily dependent on cash payments. But the Pakistani Ministry of Finance could begin promoting the use of a virtual currency and focus on increasing its use in the long-term.
