KEY POINTS
- The central bank is finalising legislation to regulate virtual assets
- Initiative follows similar steps by China, India
- The SBP is to maintain a tight monetary policy
ISLAMABAD: The Governor of the State Bank of Pakistan (SBP) has said that the central bank is preparing to launch a pilot for a digital currency, and the legislation to regulate virtual assets is in the final stages.
Jameel Ahmad made the remarks on Wednesday during a panel discussion at the Reuters NEXT Asia summit in Singapore.
He said Pakistan was “building up capacity on the central bank digital currency” and hoped to roll out a pilot soon.
Pakistan’s initiative aligns with similar efforts by regulators in China, India, Nigeria, and several Gulf countries, where digital currencies are being tested or introduced through controlled pilot programmes, Reuters news agency reported.
Ahmad stated that a new law would “establish the foundations for licensing and regulating” the virtual assets sector, adding that the central bank is currently in discussions with several technology partners.
This initiative builds on the efforts of the government-backed Pakistan Crypto Council (PCC), which was launched in March to promote the adoption of virtual assets. The PCC is exploring the use of surplus energy for bitcoin mining.
The Council has also held discussions with US-based cryptocurrency firms, including World Liberty Financial, which has links to US President Donald Trump.
In May, the State Bank of Pakistan clarified that virtual assets are not illegal. However, it advised financial institutions to refrain from engaging with them until a formal licensing and regulatory framework is in place.
“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 risk very carefully, and at the same time not allow to let go the opportunity,” he said.
Earlier, Special Assistant to Prime Minister on Crypto and Blockchain Bilal Bin Saqib announced that the government had approved the “Virtual Assets Act, 2025”, establishing an independent regulatory authority to license and oversee the cryptocurrency sector.
Meanwhile, Ahmad reaffirmed that the central bank would maintain a tight monetary policy stance to keep inflation within its medium-term target range of 5–7%.
It is pertinent to mention that Pakistan has reduced its benchmark rate from 22% to 11% over the past year, as inflation plunged from 38% in May 2023 to 3.2% in June.
“We are now seeing the results of this tight monetary policy transfer, both on our inflation as well as on the external account,” the SBP governor said.
Ahmad stated that Pakistan is not significantly vulnerable to dollar weakness, explaining that the country’s foreign debt is largely dollar-denominated, with only 13% made up of Eurobonds and commercial loans.
“We don’t see any major impact,” he said, adding that reserves had risen to $14.5 billion from under $3 billion two years ago.
Ahmad said Pakistan’s three-year $7 billion IMF programme, which runs through September 2027, was on track and had resulted in reforms in fiscal policy, energy pricing, and the foreign exchange market.
“We are confident that after that (IMF programme), maybe we will not require an immediate (follow-up).”
