Pakistan proposes new crypto framework to central bank rules

The State Bank of Pakistan has proposed a legal framework to recognize digital assets, including cryptocurrency, as official forms of currency.

If approved, the plan would allow the SBP to issue a digital currency, potentially leading to a central bank digital currency for Pakistan.

The SBP proposed amendments to the State Bank of Pakistan Act, signaling a shift in the country’s approach to digital currencies, according to the Tribune.  The proposal would make it legal for digital currencies, like Bitcoin (BTC), to be used as legal tender — a considerable change from the SBP’s prior warnings against virtual currencies.

In Pakistan, legal tender status means a currency is accepted for payment of goods, services, and debts, per the Tribune.

SBP’s oversight

The proposal also outlines a system for penalizing unauthorized digital currency issuers. By integrating digital currency management into the SBP’s responsibilities, the proposal would enable the bank to oversee currency in both physical and digital forms.

Additionally, the framework would allow dual nationals to serve in top positions within the central bank, reversing a rule that previously restricted such appointments.

This shift aligns with the government’s broader economic objectives, which include GDP growth projections of 2.5-3.5% and efforts to modernize Pakistan’s financial landscape as the world increasingly moves toward digital finance.