SBP paves the way for digital currency

Is currently reviewing, consulting with other central banks

KARACHI:

Pakistan’s central bank is making strides in the world of digital banking and aims to introduce a digital currency similar to cryptocurrencies such as Bitcoin in the near future.

Additional Director of the Digital Financial Services Group at the State Bank of Pakistan (SBP), Shoukat Bizinjo revealed that numerous central banks worldwide, including Pakistan’s, are exploring the concept of CBBCs (callable bull/bear contracts) as a potential avenue for launching digital currencies.

“Pakistan’s central bank is currently reviewing and consulting with other central banks regarding CBBCs and digital currency,” Bizinjo stated during the 16th International Conference on Mobile Commerce 2023, organised by Total Communications.

CBBCs are structured investment products that track the performance of underlying assets without requiring investors to bear the full cost of owning those assets, as explained in a press statement issued by TC.

Bizinjo further revealed that the SBP is in discussions with local industrial players to introduce digital currency within Pakistan as well.

Additionally, he highlighted the progress made by Electronic Money Institutions (EMIs) in the field of e-banking. EMIs have successfully launched e-money wallets for consumers and merchants, along with other digital payment instruments such as prepaid cards and contactless payment options.

Currently, Pakistan has four live commercial EMIs, including NayaPak, Finja, CMPECC, and Sada Tech Pakistan. He explained that EMIs have an impressive e-money balance of Rs2 billion, managing 1.6 million e-money wallets and 2.4 million payment cards as of March 31, 2023.

There are approximately 12 EMIs in various stages of acquiring licenses from the central bank, with numerous other companies in constant communication with the SBP to become EMIs, he said.

Published in The Express Tribune, June 2^nd, 2023.

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