Pakistan Prepares to Launch Digital Currency, Mirroring the Path Paved by Gulf and Asian Regulatory Bodies
As of July 2025, Pakistan is actively preparing to launch a pilot for its central bank digital currency (CBDC), often referred to as the digital rupee. This move aligns Pakistan with other countries like China, India, Nigeria, and several Gulf states exploring digital currencies through controlled programs.
The State Bank of Pakistan’s Governor, Jameel Ahmad, has confirmed that the central bank is "building up capacity" for the CBDC and hopes to roll out the pilot soon. The governor also stated that the central bank will maintain a tight policy stance to stabilize inflation within the 5-7 percent medium-term target.
In parallel, Pakistan has made a significant legislative step by enacting the Virtual Assets Act, 2025. This legislation establishes a new federal authority named the Pakistan Virtual Asset Regulatory Authority (PVARA). This autonomous regulator will oversee the licensing and supervision of crypto-related businesses within the country, ensuring compliance with international anti-money laundering standards and supporting financial innovation through mechanisms like regulatory sandboxes.
The Pakistan Crypto Council, a government-backed organisation, is also actively involved in promoting virtual asset adoption. The council has appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve.
In May, the State Bank of Pakistan clarified that virtual assets are not illegal, but advised financial institutions not to engage with them until a formal licensing framework is in place. Pakistan's central bank's mandate remains ensuring smooth interbank market functioning and maintaining ample foreign exchange, so that there is no problem as far as trade financing is concerned.
Pakistan's move to digital currency follows a period of financial reforms. The country's three-year $7 billion IMF program is on track and has already resulted in reforms in fiscal policy, energy pricing, and the foreign exchange market. Pakistan's benchmark rate has been cut from a peak of 22 percent to 11 percent over the past year, and inflation has fallen sharply from 38 percent in May 2023 to 3.2 percent in June, averaging 4.5 percent in the 2025 fiscal year just ended, a nine-year low.
Pakistan is not overly exposed to dollar weakness, with foreign debt mostly dollar-denominated and only 13 percent comprised of Eurobonds or commercial loans. Pakistan's reserves have risen to $14.5 billion from under $3 billion two years ago.
In conclusion, Pakistan’s digital currency pilot is imminent and well underway, supported by the recent enactment of comprehensive virtual asset regulation. This decisive move towards digital financial modernization and formal oversight of crypto activities is part of broader efforts to modernize Pakistan's financial system and digital finance reforms.
[1] Central Bank of Pakistan, (2025), "Digital Currency Pilot Programme", Retrieved from https://www.sbp.gov.pk/digital-currency-pilot-programme [2] Jameel Ahmad, (2025), "Statement on Digital Currency", Retrieved from https://www.sbp.gov.pk/statement-on-digital-currency [4] Pakistan Crypto Council, (2025), "Virtual Assets Act, 2025", Retrieved from https://www.pakistancryptocouncil.gov.pk/virtual-assets-act-2025 [5] Pakistan Virtual Asset Regulatory Authority, (2025), "About Us", Retrieved from https://pvara.gov.pk/about-us
- In light of the digital currency pilot program announced by the Central Bank of Pakistan (CBDP), the technology sector is expected to witness significant growth, with the CBDC being regulated by the newly established Pakistan Virtual Asset Regulatory Authority (PVARA).
- As finance and business segments continue to diversify, the integration of art and news media platforms may explore coverage of the digital rupee's development, offering valuable insights into Pakistan's digital transformation and financial modernization.
- Simultaneously, the escalating trend towards digital finance is anticipated to intersect with global events and news, as countries increasingly invest in digital currencies like Pakistan, China, India, Nigeria, and Gulf states, thereby impacting the global financial landscape.
