Pakistan’s central bank has taken a new step to accelerate its digital currency (CBDC) plans. Finance Minister Muhammad Aurangzeb’s statements at a special World Economic Forum meeting in Riyadh have given new momentum to the country’s economic transformation. Aurangzeb emphasized that the informal economy is the country’s biggest obstacle, noting that a large portion of Pakistan’s annual income is not recorded officially, amounting to approximately 40 billion.
Strengthening the Economy with CBDC Initiatives
Aurangzeb also highlighted the importance of financial inclusion for women, emphasizing policies that support women’s financial empowerment. He pointed out the importance of increasing the use of digital wallets to make women financially stronger, especially those facing issues like cash theft. Additionally, he mentioned the need to promote the use of digital payments to enhance the effectiveness of government aid programs.
It is known that the State Bank of Pakistan (SBP) aims to launch a digital rupee by 2025. SBP President Jameel Ahmad stated that the plan carefully considers the experiences of other central banks with CBDC and aims to focus on a secure digital currency. At a time of high inflation, which has increased interest in cryptocurrencies, the transition to a national digital currency is seen as an important step to strengthen the economy and maintain control.
However, Pakistan’s move is not solely due to internal economic reasons. Regional neighbors, especially India, have started pilot programs to expand the use of CBDCs. Pakistan needs to act to keep up with these developments.
Central Banks Continue R&D Efforts
The majority of central banks worldwide are actively working on researching and developing digital currencies. This highlights the timeliness of the steps taken by Pakistan’s Central Bank regarding CBDC, which offers great potential to reduce the informal economy and increase financial inclusion as part of the country’s economic transformation.
Pakistan is at a crucial turning point in its transition to a digital economy. Finance Minister Aurangzeb’s statements show that the country will continue to move forward with decisive steps in this transformation process. CBDC plans could provide a promising roadmap for Pakistan’s economic future.
