Pakistan Steps Up with Fast-Track Plans for CBDC Launch
The State Bank of Pakistan (SBP) has enacted new legislation aimed at ensuring that Electronic Money Institutions (EMIs), nonbank organizations that provide digital payment instruments, issue CBDCs by 2025.?
Central bank digital currencies (CBDCs) are regarded as a way to enhance fiat capabilities by transferring the financial prowess of cryptocurrencies to fiat, and in Pakistan, regulations have been introduced to make this possible.
According to Pakistan's finance minister, Asad Umar, "EMI adoption would enhance the digital economy, which would unquestionably secure financial institutions from any cybersecurity concerns."
The regulation ensures timely and secure CBDC issuance by prioritizing the prevention of money laundering, terrorist financing, customer safety, complaint-handling mechanism, oversight, and regulatory reporting.
Deputy Governor of SBP, Jameel Ahmad explains that this "landmark" regulation marks a significant step forward for the financial system. He said this is “a testament to the SBP’s commitment toward openness, adoption of technology and digitization of our financial system,” emphasizing that it is transforming itself to meet modern technology demands.
The adoption of CBDC in Pakistan has progressed in the wake of India's introduction of CBDC and its digitalization.?
A retail CBDC pilot will be launched by the end of 2022, according to the Reserve Bank of India (RBI). According to reports, the RBI is preparing to roll out a retail digital rupee pilot project to 10,000 to 50,000 bank customers.
CBDCs were first issued by the Bahamas in 2020. Nigeria and countries in the Eastern Caribbean Union followed suit after its success. Sweden, Jamaica, and Ukraine are evaluating their pilot programs.
CBW - External Analyst