SBP Governor Reveals Plans About Pakistan’s Official Digital Currency

Discussing the country’s economic landscape on CNN, the governor of State Bank of Pakistan (SBP), Reza Baqir, made some interesting remarks regarding financial inclusion, tackling money laundering and counts of alleged terror financing through a series of textbook digital innovations.

Like China, the possibility of developing the country’s first ever Central Bank Digital Currency for Pakistan was a major highlight of the Central bank governor’s interview.

“We are studying that very carefully”, said Reza Baqir, adding that “countries like China are already showing the way, and the benefit of that to us is two-fold”.

The governor explained that financial inclusion similar to China’s progress would not only boost Pakistan’s efforts for streamlining its finances, but also “allow us to make further progress in our fight towards anti-money laundering, towards countering terrorism financing”.

The governor remarked that for now, the central bank has allowed a framework for digital banks to begin operating in Pakistan – banks which don’t have a ‘brick and mortar’ presence and are purely digital.

In response to a question regarding international Fintech firms showing interest in Pakistan, he stated,

These companies are pretty much welcome. Other big international payment providers are very welcome

He further highlighted that Pakistan is home to the 5th largest concentration of people who’re generally tech-savvy. As far as digitization is concerned, “it’s a market that’s waiting to burst”. He added,

During COVID, we did one thing which is to eliminate fees for interbank transfers, and the impact of that was phenomenal for the quarter that ended in December.

In terms of statistics, he explained that Pakistan had “a growth of about 50-200%, compared to a year ago by banking transactions. For internet banking transactions, that number is around 100-150% in growth”.

The SBP Governor concluded on hailing Pakistan’s growth as market that’s very open, and “embraces any global payment operator that wants to come to Pakistan”.

In 2019, the State Bank of Pakistan had initially panned out a long-term blueprint for launching its own digital currency by 2025, with fully digitized and technologically equipped regulatory measures which, when completed, would help redefine the role of central banking.

Two years later, that plan looks very much likely to be revived as the country aims to fulfill the remaining FATF points for financial inclusion in the longer run.

Source: Pro Pakistani