State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Wednesday that the bank is preparing to launch a pilot project for a digital currency and is finalising legislation to regulate virtual assets, as the country ramps up efforts to modernise its financial system.
Central banks globally are exploring the use of digital currencies as interest in blockchain-based payments grows. Pakistan's move follows similar steps by regulators in China, India, Nigeria and several Gulf states to test or issue digital currencies through controlled pilot programmes.
At the Reuters NEXT Asia summit in Singapore, Ahmad said Pakistan was "building up our capacity on the central bank digital currency" and hoped to roll out a pilot soon. He was speaking on a panel alongside Sri Lanka's central bank governor, P Nandalal Weerasinghe, with both discussing monetary policy challenges in South Asia.
Ahmad said a new law would "lay down the foundations for the licensing and regulation" of the virtual assets sector and that the central bank was in touch with some tech partners. The move builds on efforts by the Pakistan Crypto Council, set up in March to drive virtual asset adoption.
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The PCC is exploring bitcoin mining using surplus energy and has appointed Binance founder Changpeng Zhao as a strategic adviser and plans to establish a state-run bitcoin reserve. It has also held talks with US-based crypto firms, including the Trump-linked World Liberty Financial.
In May, the SBP clarified that virtual assets were not illegal. However, it advised financial institutions not to engage with them until a formal licencing framework was in place.
"There are risks associated, and at the same time, there are opportunities in this new emerging field. So we have to evaluate and manage the risk very carefully, and at the same time not allow to let go the opportunity," he said on the panel.
On Wednesday, Special Advisor to PM on blockchain and crypto, Bilal bin Saqib, said in a statement that the government had approved the "Virtual Assets Act, 2025" creating an independent regulator to licence and oversee the crypto sector.
Tight grip, falling rates
Ahmad said the central bank would continue to maintain a tight policy stance to stabilise inflation within its 5-7% medium-term target. Pakistan has cut its benchmark rate from a peak of 22% to 11% over the past year, as inflation slumped from 38% in May 2023 to 3.2% in June, averaging 4.5% in the 2025 fiscal year just ended, a nine-year low.
"We are now seeing the results of this tight monetary policy transfer, both on our inflation as well as on the external account," he said.
Ahmad said Pakistan was not overly exposed to dollar weakness, noting its foreign debt was mostly dollar-denominated and only 13% comprised Eurobonds or commercial loans. "We don't see any major impact," he said, adding that reserves had risen to $14.5 billion from under $3 billion two years ago.
Ahmad said Pakistan's three-year $7 billion IMF programme, which runs through September 2027, was on track and had resulted in reforms in fiscal policy, energy pricing and the foreign exchange market. "We are confident that after that (IMF programme), maybe we will not require an immediate (follow-up)."
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