Pakistan Advances Toward Rupee-Backed Stablecoin and CBDC Development
Pakistan is assessing the potential for launching a rupee-backed stablecoin, as policymakers and industry experts highlight the economic benefits of digital asset regulation. The move comes amid warnings that slow adoption could cost the country up to $25 billion in missed opportunities.
Stablecoin Considerations and Economic Impact
At the Sustainable Development Policy Institute (SDPI) Conference on Friday, Pakistan Banks Association (PBA) President Zafar Masud said the stablecoin market could drive $20�$25 billion in domestic growth. He emphasized that Pakistan could benefit from participating in the expanding global stablecoin sector and noted that the government is considering a rupee-pegged digital currency.
Masud added that a central bank digital currency (CBDC) could improve access to finance and help lower remittance costs for the nation�s large population of unbanked adults.
CBDC Development Insights
Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, revealed that a CBDC prototype is being developed. The project is receiving technical support from the World Bank and International Monetary Fund (IMF), with a pilot phase planned before wider deployment. The goals include fostering financial inclusion and streamlining digital payments.
Private Sector Initiatives and Regulatory Progress
Private firms are also working to expand stablecoin access. ZAR, a fintech startup, plans to make dollar-pegged stablecoins available to everyday users in Pakistan and other emerging economies. ZAR�s backers include Andreessen Horowitz (a16z), Dragonfly Capital, VanEck Ventures, Coinbase Ventures, and Endeavor Catalyst. The company targets Pakistan's 240 million population, where more than 100 million adults remain outside the formal banking system.
As international interest in Pakistan�s crypto sector grows, the country has improved its ranking among global crypto adopters. According to Cointelegraph, Pakistan recently secured third place in a key adoption index, reflecting rapid growth in digital asset activity.
Regulatory Developments
In September, Pakistan enacted a federal regulatory framework allowing international crypto exchanges and virtual asset service providers (VASPs) to operate. The Pakistan Virtual Asset Regulatory Authority (PVARA) is now responsible for licensing, supervising, and regulating digital asset firms. Leading industry players have been encouraged to submit Expressions of Interest to support the sector's expansion.
Pakistan�s consideration of a rupee-backed stablecoin and active work on a CBDC prototype mark significant steps in the country�s approach to digital assets. Policymakers and industry leaders continue to weigh the potential benefits and risks as the market evolves.
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