The State Bank of Pakistan (SBP) is preparing to embark on a pilot launch of Pakistan’s first digital currency in the coming months. This strategic move is part of the SBP’s long-term vision and aims to provide a secure and efficient means of conducting digital transactions. “Central Bank digital currencies (CBDCs) are more secure compared to cryptocurrencies and are designed to complement existing physical cash and traditional forms of electronic money. The currencies are built on blockchain technology (DLT) and are intended to provide a secure and efficient means of conducting digital transactions,” said the deputy governor of SBP.
Setting the Stage for Pakistan’s First Digital Currency
Deputy Governor of the State Bank of Pakistan, Sima Kamil, revealed that the groundwork for the pilot launch of the digital currency has been completed. To ensure a controlled and supervised testing environment for innovative products and services, the SBP plans to launch a sandbox within the next month or two. This sandbox will allow the testing of Pakistan’s digital currency in a limited setting, enabling the evaluation of its functionality and potential impact on the financial ecosystem.
Differentiating Central Bank Digital Currencies (CBDCs) from Cryptocurrencies
The SBP’s decision to introduce its digital currency marks a departure from its previous stance on cryptocurrencies like Bitcoin, Litecoin, Pakcoin, OneCoin, and DasCoin, which were deemed illegal within the country. Deputy Governor Sima Kamil emphasized that CBDCs, including Pakistan’s digital currency, are distinct from cryptocurrencies. CBDCs, built on blockchain technology (DLT), are specifically designed to enhance security and complement existing physical cash and traditional electronic money. They provide a secure and efficient platform for digital transactions, offering a promising avenue for advancing financial inclusivity and streamlining payment systems.
The Global Landscape: CBDC Adoption and Pilots
While Pakistan prepares for its digital currency pilot, several countries have already launched their CBDCs or initiated pilot programs. Nigeria, Jamaica, and the Bahamas have successfully launched their CBDCs, demonstrating the practical implementation of digital currencies within their respective financial systems. Additionally, countries like China, India, Saudi Arabia, France, Ghana, Canada, and Uruguay have embarked on CBDC pilot projects, showcasing the global interest in this transformative financial technology.
Also read: Waqar Zaka Urges Pakistan to Embrace Digital Currency
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