Crypto Gloom

Pakistan legalizes digital assets, paves the way for cryptocurrencies and CBDC

Amid the changing economic environment, the State Bank of Pakistan (SBP) recently proposed a new regulatory framework to legalize digital assets, including cryptocurrencies, and establish a Central Bank Digital Currency (CBDC). The Monetary Policy Committee (MPC) amendments announced on November 4 seek to modernize Pakistan’s financial infrastructure by opening the door to regulated use of digital currencies. This move is important for Pakistan’s digital assets and future.

Proposed Reforms and Potential Impact

The MPC meeting led by SBP Governor Jameel Ahmad introduced amendments that could transform Pakistan’s financial sector. If the amendment passes the next legislative stage, the SBP could issue a government-backed digital currency, potentially a digital Pakistani rupee. The framework also strengthens oversight and deters illegal activity by imposing penalties on unauthorized digital currency issuers. These changes demonstrate Pakistan’s commitment to developing digital assets responsibly.

The new policy allows the state bank to process digital transactions and oversee cryptocurrency services such as buying, selling and trading. The framework aims to meet the growing demand for digital assets in Pakistan while reducing risks associated with unauthorized transactions.

Pakistan legalizes digital assetsPakistan legalizes digital assets
Source: Sammatv

Pakistan’s stance on cryptocurrencies: policy changes

The move marks a significant departure from Pakistan’s previous stance. Last year, former Finance Minister Aisha Ghaus Pasha announced the government’s intention to curb cryptocurrencies. However, her successor, Muhammad Aurangzeb, brought a new outlook to Pakistan’s financial policy. Aurangzeb, former CEO of Habib Bank Limited, was quick to move away from his anti-cryptocurrency stance in line with SBP’s push to regulate digital assets. These changes highlight how important Pakistan’s digital assets are now to its future growth.

Economic indicators and cryptocurrency market

Along with these digital reforms, the MPC also announced a 2.5% interest rate cut in response to reduced food price inflation and favorable global oil prices. MPC’s optimism extends to its GDP growth forecast, predicting growth of 2.5 to 3.5 percent in fiscal 2025. These positive economic indicators combined with the proposed regulatory changes could create a supportive environment for the growth of the Pakistani cryptocurrency market. Especially when it comes to digital assets.

Enhanced Compliance and Security

SBP plans to set a legal framework for digital assets to limit risks posed by unregulated cryptocurrency activities and unauthorized platforms. This framework could increase trust in digital asset markets among both institutional and retail investors by imposing penalties on operators outside of approved channels. These measures are essential for the stability and growth of digital assets in Pakistan.

conclusion

The SBP’s policy change highlights Pakistan’s growing focus on digital transformation and economic modernization. Potentially legalizing cryptocurrencies and introducing a government-backed digital currency could position Pakistan as a regional leader in digital finance. With legislative approval, this approach could strengthen the security and legitimacy of digital assets and support Pakistan’s economic growth and integration into the evolving global financial system, especially as Pakistani digital assets grow more relevant.