State Bank of Pakistan (SBP) is gearing up to pioneer the launch of the country’s first digital currency. This significant move towards digitization is expected to take place within the next two months, following the completion of the necessary groundwork.
Deputy Government SBP, Sima Kamil, revealed this development in a statement quoted by Arab News. She further explained that the digital currency would be tested in a controlled environment, known as a sandbox, before its official launch. This sandbox testing phase, set to commence in a month or two, will allow for the evaluation of innovative products, services, or business models in a limited and supervised manner.
This initiative to launch a digital currency forms part of the SBP’s five-year strategy, dubbed “SBP Vision 2028”. Despite the bank’s previous reluctance to legalize digital currencies such as Bitcoin, Litecoin, Pakcoin, OneCoin, and DasCoin, it has now decided to introduce its own digital currency. This decision comes in light of significant investments being made in digital tenders.
Central Bank Digital Currencies (CBDCs), like the one SBP plans to launch, are designed to complement existing physical cash and traditional forms of electronic money. They offer a more secure alternative to cryptocurrencies and are built on blockchain technology (DLT), providing a secure and efficient means of conducting digital transactions.
It’s important to note that CBDCs differ from cryptocurrencies, as clarified by the deputy governor of SBP. While only a few countries, including Nigeria, Jamaica, and the Bahamas, have launched their CBDCs, others like China, India, Saudi Arabia, France, Ghana, Canada, and Uruguay are in the pilot stages of their respective digital currencies.
As Pakistan prepares to join these nations in the digital currency revolution, the SBP’s move marks a significant step towards modernizing the country’s financial landscape.
