Pakistan State Bank Plans Digital Currency Pilot, Virtual Assets Regulation

The State Bank of Pakistan (SBP) is preparing to launch a pilot for a central bank digital currency (CBDC) as part of its efforts to modernize the country's financial system, announced Governor Jameel Ahmad at the Reuters NEXT Asia summit in Singapore. Alongside the pilot, Pakistan is finalizing the Virtual Assets Act 2025 to regulate cryptocurrencies and establish an independent regulator to license crypto firms. The government-backed Pakistan Crypto Council (PCC), led by CEO Bilal bin Saqib, is promoting virtual asset adoption by exploring bitcoin mining using surplus energy, appointing Binance founder Changpeng Zhao as a strategic advisor, and planning a state-run bitcoin reserve. The PCC has engaged with U.S. firms, including World Liberty Financial, which is connected to President Donald Trump. While virtual assets are legal in Pakistan, the SBP has advised financial institutions to await formal licensing regulations due to the risks involved, with the central bank emphasizing the need to carefully manage these risks while not missing out on opportunities. Pakistan's improving economic indicators, such as increased foreign reserves and lower inflation, support the introduction of the CBDC, and the country's $7 billion IMF program through 2027 underpins ongoing economic reforms.