The Finance Minister of Pakistan Reaffirms the Goals of the Government Regarding Digital Currency

Pakistan’s minister of finance, Muhammad Aurangzeb, revived the topic of a central bank digital currency (CBDC) on Sunday, giving the proposal new blood.

According to World Echo, a local news agency, Aurangzeb mentioned the nation’s undocumented economy as the main obstacle at the World Economic Forum (WEF) special conference in Riyadh. He said that Pakistan’s yearly income is Rs. 9.4 trillion ($33.7b), with around half of that amount going unrecorded.

He went on to say that financially included people have it tough, especially women who deal with problems like family members stealing from them. He spoke about government programmes that help Pakistani women, but he also said that digital wallets may provide them with more financial independence.

Managing Director Kristalina Georgieva of the International Monetary Fund (IMF) also voiced her worry about Pakistan and other countries’ economic woes on the occasion. She made reference to a worldwide economic gap, where some nations are doing quite well and others are falling far behind.

The State Bank of Pakistan (SBP), the central bank of Pakistan, is planning to establish a digital rupee as soon as 2025, with the goal of expediting its growth. In July 2023, Governor Jameel Ahmad made the announcement, stating that the proposal takes into account the experiences of other central banks with CBDCs. A carefully crafted and securely encrypted digital currency for Pakistan was Ahmad’s top priority.

A number of developing countries’ central banks use CBDCs to help the unbanked, but Pakistan’s likely to have other goals in mind.

Businesses and people in Pakistan may be turning to cryptocurrency as a means to escape the country’s high inflation rate (20.7% as of May). In 2023, despite restrictions imposed by the government, Pakistan ranked eighth in the world for cryptocurrency adoption, surpassing Brazil. Keeping tabs on the national digital currency and fighting off the enticement of cryptocurrencies might be the SBP’s goal in contemplating a CBDC.

There’s a danger that Pakistan’s central bank will lag behind other countries in the hunt for CBDCs. It seems like the SBP is playing catch-up, since regional neighbours like India are already testing both wholesale and retail applications for their CBDCs.

In light of the pressing need to increase the availability and functionality of central bank money, more than ninety-eight percent of the world’s central banks are now investigating CBDCs.

Also Read: The Lazarus Group strikes again with a new crypto phishing scam aimed at LinkedIn users