Pakistan's central bank to change rules to allow digital assets
The State Bank of Pakistan (SBP) has unveiled a series of policy proposals
aimed at legalizing digital assets, including cryptocurrencies, as legal tender
across the country. Announced on November 4, the proposals, if approved, could
bring sweeping changes to Pakistan's financial sector.
In a meeting chaired by SBP Governor Jameel Ahmad, the Monetary Policy
Committee (MPC) put forward amendments to existing policies that would enable
state-run banks to issue digital currencies. The proposed changes also include
penalties for cryptocurrency issuers operating without proper regulatory
approval.
At the core of these proposed amendments is the potential introduction of a
central bank digital currency (CBDC), likely in the form of a government-backed
digital rupee. If approved, this could mark a significant step toward
formalizing digital currencies in Pakistan's financial system.
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In addition to the CBDC, the proposals would grant state banks the authority
to process digital payments, paving the way for blockchain-based transactions.
This could allow for the buying, selling, and trading of cryptocurrencies, and
potentially enhance the country’s digital payment infrastructure.
Shifting Stance on Cryptocurrencies
The policy shift represents a dramatic reversal from the MPC's earlier
stance on cryptocurrencies. As recently as May 2023, the country’s then
Minister of State for Finance and Revenue, Aisha Ghaus Pasha, led discussions
suggesting that Pakistan was considering a ban on cryptocurrencies.
However, following her replacement by former Habib Bank Limited CEO Muhammad
Aurangzeb in March 2024, there has been a notable shift in policy. Aurangzeb
has signaled a more favorable approach to digital assets, supporting the
ongoing efforts to regulate and potentially integrate cryptocurrencies and
blockchain technology into the mainstream financial system.
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If the proposed amendments are approved by the government, Pakistan could
become one of the first countries in the region to officially recognize
cryptocurrencies and CBDCs as part of its legal financial framework.
Source: Coin Telegraph