Pakistan’s central bank has taken a major step toward modernizing its financial system by moving its planned digital currency into the testing stage. The State Bank of Pakistan (SBP) confirmed that the project, known as a central bank digital currency (CBDC), is now under trial.
A Cash-Free Alternative on the Horizon
The digital currency is being designed to function without physical cash or even a traditional bank account. Officials say the aim is to boost financial inclusion, making it easier for people—especially those outside the formal banking system—to access secure and quick payment options.
If rolled out successfully, this system would allow routine transactions, such as sending money or paying bills, to be completed directly through a mobile wallet.
How the Digital Wallet Will Function
The SBP plans to distribute mobile wallet apps either directly or through licensed banks and financial institutions. Key features under development include:
- Instant transfers using QR codes
- Easy sign-up through a national identity card
- Money transfers by simply entering the recipient’s phone number
- Government payments, such as taxes and fees, paid directly from the wallet
The entire process is intended to be paperless, secure, and user-friendly.
Regulations in the Works
Before the currency goes live, the SBP is drafting rules to govern its use and monitor transactions. This framework will be finalized during the pilot phase to ensure the system is not only efficient but also tightly regulated against misuse.
Global Context
Pakistan is not venturing into uncharted territory. Nigeria already runs a fully launched CBDC, while economic heavyweights like China, Russia, and the United Arab Emirates are conducting pilot projects of their own. For Pakistan, the move represents both a modernization push and a bid to keep pace with international financial innovation.
