Pakistan is set to launch a pilot program for a central bank digital currency (CBDC) later this year. The project is in partnership with Japanese blockchain company Soramitsu. This initiative aims to create a digital version of the Pakistani rupee.
The pilot will use Soramitsu’s CBDC platform and is funded by Japan’s Ministry of Economy, Trade, and Industry. It is part of the Global South Future-Oriented Co-Creation Project. The State Bank of Pakistan (SBP) is leading the effort within the country.
SBP Governor Jameel Ahmad has confirmed that Pakistan is working to build capacity for a digital currency. The goal is to modernize financial services and improve the ease of transactions across Pakistan.
Many rural areas in Pakistan rely heavily on cash and have low bank account ownership. Masato Toriya, an associate professor at Tokyo University of Foreign Studies, said the CBDC could reduce the high costs of cash handling and distribution in these regions.
Soramitsu has worked on similar CBDC projects before. These include Cambodia’s Bakong system and pilots in Papua New Guinea and the Solomon Islands. Pakistan’s project is the largest to date due to its large population and growing economy.
The digital currency plan also ties into Pakistan’s growing economic ties with China, especially through the China-Pakistan Economic Corridor. While China tests its digital yuan, Pakistan’s CBDC could help maintain financial independence.
Soramitsu is also developing offline capabilities for the digital currency. This will allow users to make transactions via smartphones even without internet access, which is important given Pakistan’s uneven internet and electricity coverage.
This pilot marks an important step for Pakistan’s digital economy and financial inclusion.
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