Proposed Changes Could Transform Pakistan’s Financial Sector
The State Bank of Pakistan (SBP) has unveiled a set of policy proposals on November 4 that, if approved, would legalize digital assets like cryptocurrencies as lawful tender nationwide.
During a meeting led by SBP governor Jameel Ahmad, the Monetary Policy Committee (MPC) submitted amendments to its standing policy, proposing that state banks be allowed to issue digital currency. These amendments also include penalties for digital currency issuers operating without authorization.
Although these proposals require further governmental approval, their passage could pave the way for a central bank digital currency (CBDC), potentially a state-backed digital rupee.
Additionally, the report notes that state banks could gain the ability to manage digital payment services, facilitating blockchain-based activities such as cryptocurrency transactions.
Cryptocurrency Adoption in Pakistan
Historically, the MPC has shown reluctance toward embracing cryptocurrencies. As previously reported by Cointelegraph, then-Minister of State for Finance and Revenue Aisha Ghaus Pasha hinted at potential bans on cryptocurrency in May 2023.
However, with former Habib Bank Limited CEO Muhammad Aurangzeb stepping in as Finance Minister in March 2024, a notable shift occurred, signaling a reversal of the MPC’s anti-crypto stance.
Interest Rate Reduction
On November 4, the MPC announced a 2.5% interest rate cut, coupled with positive economic projections. They cited factors like declining food inflation, favorable global oil prices, and the absence of anticipated adjustments in gas tariffs and PDL rates as reasons for this optimistic outlook.
“Overall, the MPC expects real GDP growth in FY25 to surpass prior estimates, ranging from 2.5% to 3.5%,” the committee stated.
Should the SBP’s amendments be approved, they could act as a bullish signal for Pakistan’s cryptocurrency and digital asset market by formalizing regulations and curbing unauthorized trading.
