Pakistan’s Digital Currency Initiative
In a move to modernize its financial system, Pakistan is partnering with Soramitsu, a Japanese firm specializing in blockchain technology, to develop its own central bank digital currency (CBDC). This collaboration is part of broader efforts by numerous nations to transition their payment frameworks into the digital sphere.
Focus on the Digital Rupee
With a focus on creating a digital rupee, Pakistan is set to execute a pilot project that incorporates offline payment capabilities, ensuring usability in areas lacking internet connectivity.
Funding and Expertise
The initiative will be funded through Japan’s Ministry of Economy, Trade, and Industry, via its Global South Future-Oriented Co-Creation Project, as reported by Nikkei Asia. Soramitsu has a proven track record in this arena, having previously assisted in the rollout of a digital currency prototype in Papua New Guinea and aided the Central Bank of the Solomon Islands in the creation of Bokolo Cash, their own CBDC.
Regulatory Developments
Discussions about a digital currency have been ongoing in Pakistan since 2019, but Central Bank governor Jameel Ahmad recently announced plans to roll out a pilot program by July. He also stated that regulations governing digital assets are nearing completion, which is crucial for the CBDC’s launch.
Implications for Rural Areas
The Pakistani digital currency aims to facilitate transactions under cash-like conditions, which is particularly important for rural areas that may lack reliable internet access. Success in this project could set a precedent for other nations facing similar challenges in cash distribution.
Interest in Bitcoin and Crypto Mining
In addition to the development of its national digital currency, Pakistan has expressed interest in creating a comprehensive framework for bitcoin, including the establishment of a national bitcoin reserve. Recently, Pakistani officials engaged in discussions with El Salvador’s President Nayib Bukele to learn about his country’s experiences with bitcoin adoption, a pioneering journey they are keen to learn from.
Moreover, plans are being considered to dedicate 2,000 megawatts of energy for crypto mining and artificial intelligence data infrastructure.
