Pakistan Launches Digital Currency Pilot

Modernizing Pakistan’s Financial System

Pakistan has officially joined the growing number of countries testing a central bank digital currency (CBDC). In July 2025, the State Bank of Pakistan (SBP) launched a pilot to explore how a digital currency could improve payment systems, reduce remittance costs, and promote financial inclusion.

Governor Jameel Ahmad announced the launch during the Reuters NEXT Asia summit, describing the pilot as a foundational step toward digital transformation in finance. This comes alongside the introduction of the Virtual Assets Act 2025, a legal framework to regulate digital assets and provide oversight for fintech innovations.

The move reflects a broader shift seen in countries like China, India, and Nigeria, which are also testing or rolling out digital currency systems.

 

What the CBDC Pilot Involves

The CBDC pilot is being integrated with PRISM, Pakistan’s real-time gross settlement system. The goal is to test digital payments, wallet-based transactions, and cross-border functionality in a controlled environment.

Key features include:

• Issuance of the digital currency by the SBP

• Real-time testing of payment flows across banks and users

• Monitoring systems to evaluate security, speed, and accessibility

• Partnerships with licensed fintech firms and international advisors

• Support from the Pakistan Crypto Council for development and research

The pilot will also test mobile wallet integration with platforms such as Raast and M-Pesa, enabling real-time peer-to-peer payments without reliance on cash.

Why This Pilot Matters

The launch of the CBDC pilot addresses multiple national challenges:

1. Financial inclusion
   Millions of Pakistanis still lack access to formal banking. A digital currency linked to mobile wallets can help bridge this gap.
2. Secure and low-cost remittances
   With over $38 billion sent home annually, digital currency could lower transaction costs and speed up transfers.
3. Improved transparency
   By digitizing payments, the government can better monitor transactions, reduce fraud, and support tax enforcement.
4. Legal clarity
   The Virtual Assets Act provides a clear framework to support innovation while managing risks such as money laundering and market manipulation.

This initiative is also tied to Pakistan’s broader economic reforms, including its work with the IMF to strengthen governance, reduce fiscal gaps, and modernize key public services.

 

Building for the Future

The central bank has stressed that virtual assets are not illegal, but their use requires regulation. By launching this pilot and introducing formal rules, the government aims to stay ahead of emerging financial technologies.

International firms, including crypto platforms and payment providers, are watching closely. The pilot may pave the way for broader partnerships, foreign investment, and improved access to capital for local fintech startups.