According to the Dawn, a local media outlet, Pakistan’s central bank has announced plans to have a digital currency by 2025.
Digital Version of the Pakistani Rupee
Speaking about the regulation of Electronic Money Institutions, non-bank entities that will be allowed to issue “e-money” for digital payments, Pakistan’s State Bank Deputy Governor Jameel Ahmad told the audience that digital currency is more efficient. He also called on the government to ensure that cybersecurity was a top priority moving forward so that Pakistanis can fully take advantage of recent innovations.
While the Pakistani government has given itself a long window to create an “e-rupee,” private entities will be able to build digital solutions in the meantime. Ahmad said:
“It is our government’s policy to encourage the use of e-commerce amongst public through awareness campaigns to promote a culture of e-commerce, which supports electronic business transactions at national, regional and international levels.”
From Branchless Banking to Blockchain Remittances to a Fiat Blockchain Token
Pakistan’s last great financial innovation, according to the Dawn, was the legalization of web banks or “branchless banking.” The next step is allowing non-banks to participate in the facilitation of payments, which provides a framework for blockchain companies to apply for regulatory approval. The central bank intends to launch its digital version of the country’s Rupee, but not many more details have emerged regarding that. The entire world is moving towards a cashless state. Ahmad spoke to the success of branchless banking:
“Over the past few years, branchless banking providers have evolved well and are now offering financial services to a large segment of our population.”
In some ways, Pakistan was ahead of many other countries in terms of mobile banking solutions and even received praise from the World Bank some years back.
Blockchain, an industry growing at a rapid rate, provides the necessary tools to ensure that transparency and efficiency are part of the digitized fiat equation. Systems that forego the use of blockchains are likely to be inferior and more vulnerable to corruption if the current fiat system is any indicator. The amount of counterfeit dollars is technically an unknown – that they exist in the millions or billions is an absolute fact. An analysis in the early days of Bitcoin presumed that for every $10,000 legitimate dollars, at least $1 is counterfeit.
Earlier this year, a Pakistani bank announced the utilization of blockchain for international remittances from Malaysia.