The State Bank of Pakistan (SBP), under the direction of its governor, Jameel Ahmad, has introduced a package of policy proposals aimed at legalizing digital assets, including cryptocurrencies, across the country. The proposals were developed by the Monetary Policy Committee (MPC) and presented on November 4, 2024.
The MPC’s policy package includes amendments that, if approved, would allow digital assets to be used as legal tender in Pakistan. The proposed framework would enable state banks to issue digital currency, potentially introducing a central bank digital currency (CBDC) in the form of a government-backed digital rupee. Additionally, the proposals would establish penalties for unauthorized digital currency issuers and authorize state banks to process digital payment services, thus enabling blockchain-based transactions such as cryptocurrency trading and exchanges.
These proposals were announced on November 4, 2024. They mark a significant shift in policy, particularly since May 2023, when Pakistan’s Ministry of Finance indicated plans to ban cryptocurrencies. This change aligns with recent leadership adjustments, as former Habib Bank CEO Muhammad Aurangzeb replaced Aisha Ghaus Pasha, the previous finance minister, in March 2024. Aurangzeb has since signaled a more favorable stance toward digital assets.
The changes would apply nationwide in Pakistan, with central banks and financial institutions authorized to operate under a regulatory framework for digital assets. If approved, this framework would impact both private and public sectors, encouraging a more secure and regulated environment for digital currency transactions within Pakistan.
The SBP’s move to legalize digital assets reflects the government’s optimism about economic improvements. Alongside this announcement, the MPC also introduced a 2.5% interest rate cut, citing positive economic indicators such as a drop in food inflation, favorable global oil prices, and steady gas tariffs. The MPC projects real GDP growth between 2.5% and 3.5% for FY25, which they expect to contribute to a more robust financial environment that could support digital currency adoption.
If approved, the amendments would require digital currency issuers to operate with official authorization and impose penalties on unauthorized entities, reducing illicit trade. This regulatory framework would foster a safe and transparent market for digital assets in Pakistan, potentially benefiting the economy and legitimizing digital asset usage in financial transactions across the country.
, under the direction of its governor, Jameel Ahmad, has introduced a package of policy proposals aimed at){kind=link}