Central Bank of Pakistan Governor Jameel Ahmad said the regulator plans to accelerate the development of the digital Pakistani rupee in the coming months to ensure it is not left behind by innovation. The SBP will learn from the experience of other central banks, which will avoid possible mistakes.
However, the regulator will take a measured and unhurried approach to the launch of the pilot project, focusing on a thorough study of the benefits and risks associated with state-owned stablecoin. CBDC could be available for public use as early as the end of 2025, Ahmad noted.
The SBP manager said that right now the research on the state cryptocurrency is at an early stage, so it is not known whether the CBDC will be tested by the central bank as a retail or wholesale CBDC. The central bank is expected to test two versions of the digital Pakistani rupee, as the Reserve Bank of India (RBI) has done.
RBI had earlier said that the retail digital rupee is meant for the private sector and the wholesale one for banks and financial institutions. In November, the Indian central bank began testing wholesale CBDC for secondary market settlement of securities.
Pakistan’s central bank believes the state-owned stablecoin can speed up settlement and international remittances. The upcoming pilot project will be conducted in phases, involving local commercial banks and a small number of participants. If the test is successful, other Pakistani cities will also participate in the pilot program.
Late last year, the Bank of Pakistan began preparing the legal framework laying the foundation for the launch of the central bank’s digital currency. That a digital rupee could provide an alternative to private cryptocurrencies and also help reduce dependence on the US dollar, the central bank started thinking about as early as 2019.