Pakistan’s government is planning to introduce digital cash as a solution to the country’s economic turmoil and heightened inflation. The proposed digital currency will help strengthen the rupee and facilitate secure financial transactions. The State Bank of Pakistan will support the issuance of the digital currency, similar to currency notes, and has been working with experts to bring this digital currency to life.
In addition to this, the State Bank of Pakistan has also shown interest in virtual assets, as reported by invezz.com. While prioritizing consumer protection, the bank recognizes the potential of cryptocurrencies in the future of finance.
The Central Bank Digital Currency (CBDC) department is currently evaluating the advantages of the digital rupee to ensure smooth implementation upon its launch. While the government plans to gradually replace currency notes, they intend to maintain a ratio of 20:80 (notes-digital cash) to ensure security in unforeseen circumstances.
The introduction of digital currency will also lead to a reduction in expenses related to printing and distributing physical notes. By utilizing blockchain technology, each transaction can be recorded, further supporting robust financial policies. Moreover, digital currency has the potential to enhance international trade and improve remittance services. The World Bank believes that CBDCs will enhance the reliability, resilience, and efficiency of the financial sector.
Pakistan’s digital currency strategy aligns with other countries that are exploring central bank digital currencies (CBDCs). Many nations are researching and planning to introduce digital versions of their currency notes before the end of the decade. China is leading the way, with plans to launch its digital currency in 2024. The United States and the United Kingdom are also expected to launch their CBDCs by 2030.
In conclusion, Pakistan’s decision to launch a digital rupee aims to stabilize the economy by reducing currency printing costs, strengthening the rupee, and facilitating secure financial transactions. This move aligns with the global trend of exploring and implementing CBDCs to enhance the efficiency and reliability of the financial sector.