Pakistan government to introduce digital currency for rupee stabilization

The Pakistani government has taken the decisive step of initiating the development of a digital currency, aimed at reducing costs associated with the production and distribution of physical cash. This strategic move is anticipated to bolster the value of the Pakistani rupee and enhance the country’s economic landscape by streamlining financial transactions.

This digital currency will be on par in value with the traditional Pakistani rupee, much like the equivalence between one unit of Chinese digital currency and one Chinese Yuan. The State Bank of Pakistan (SBP) is the driving force behind this project, with the government providing full backing, similar to the guarantee traditionally afforded to paper currency. The SBP has already commenced collaborative efforts with experts to advance the creation of this digital currency.

A dedicated entity known as the Central Bank Digital Currency has been established to meticulously evaluate the costs and benefits while assessing the feasibility of this digital currency. The government envisions a gradual transition from paper money to digital currency, with a coexistence model of approximately 80% digital currency and 20% paper currency. This ensures that paper money remains available when necessary.

The shift towards digital currency is poised to yield savings in the production and distribution of paper currency, while every digital transaction will be meticulously recorded, thereby facilitating more effective economic management by the government.

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