Pakistan’s Finance Minister Reiterates Government’s Focus on Digital Currency

Pakistan’s Plans for a Central Bank Digital Currency (CBDC)

Pakistan is making significant strides towards implementing a central bank digital currency (CBDC) to address various economic challenges and promote financial inclusion.

Finance Minister’s Advocacy for CBDC

During the World Economic Forum (WEF) special meeting in Riyadh, Finance Minister Muhammad Aurangzeb reiterated the need for a CBDC in Pakistan. He emphasized the impact of the nation’s undocumented economy and highlighted the potential benefits of a digital currency.

• Pakistan’s annual revenue stands at Rs. 9.4 trillion ($33.7b).
• About half of Pakistan’s economy is not officially recorded, posing a significant hurdle.
• Financial inclusion, especially for women, remains a challenge due to issues like cash theft.

IMF Director’s Concerns

At the same event, IMF Managing Director Kristalina Georgieva expressed concerns about economic disparities in nations like Pakistan. She pointed out a global economic divide and the struggles faced by certain countries.

Pakistan’s CBDC Development Progress

The State Bank of Pakistan (SBP) is actively working towards launching a digital rupee, with a target year of 2025. Governor Jameel Ahmad announced the initiative in July 2023, emphasizing the importance of learning from other central banks’ experiences with CBDCs.

• The SBP is prioritizing a well-designed and secure digital currency for Pakistan.
• Financial inclusion and addressing high inflation are key motivations behind Pakistan’s CBDC efforts.

Global Trends in CBDC Adoption

Pakistan’s central bank faces pressure to keep up with global trends in CBDC adoption. With over 98% of central banks exploring digital currencies, there is a growing urgency for Pakistan to accelerate its CBDC development to enhance access to central bank money and stay competitive in the digital currency landscape.