Pakistan’s central bank is making strides in its digital currency plans, with Finance Minister Muhammad Aurangzeb’s recent statements at a World Economic Forum meeting in Riyadh providing new impetus for the country’s economic transformation. Aurangzeb emphasized that the informal economy poses the biggest obstacle to Pakistan’s progress, as a significant portion of the country’s annual income goes unrecorded, amounting to approximately 40 billion.
Aurangzeb also stressed the importance of financial inclusion for women, highlighting the need for policies that support their financial empowerment. He emphasized the use of digital wallets to make women financially stronger, particularly those who face issues like cash theft. Furthermore, he advocated for the promotion of digital payments to enhance the effectiveness of government aid programs.
The State Bank of Pakistan (SBP) aims to launch a digital rupee by 2025, taking into account the experiences of other central banks with central bank digital currencies (CBDCs). SBP President Jameel Ahmad emphasized the importance of focusing on a secure digital currency, especially in a time of high inflation and growing interest in cryptocurrencies. Introducing a national digital currency is seen as a crucial step to strengthen the economy and maintain control.
However, Pakistan’s decision to pursue a CBDC is not solely driven by internal economic factors. Regional neighbors, particularly India, have already initiated pilot programs to expand the use of CBDCs, prompting Pakistan to take action in order to keep up with these developments.
Central banks worldwide are actively engaged in researching and developing digital currencies, indicating the timeliness of Pakistan’s efforts in this area. Implementing a CBDC has the potential to reduce the informal economy and increase financial inclusion, aligning with Pakistan’s broader economic transformation goals.
Pakistan finds itself at a pivotal moment in its transition to a digital economy. Finance Minister Aurangzeb’s statements underscore the country’s commitment to pressing forward with decisive steps in this transformation process. The CBDC plans could provide a promising roadmap for Pakistan’s economic future.
Disclaimer: The information provided in this article is not investment advice. Investors should be aware of the high volatility and associated risks of cryptocurrencies and conduct their own research.
