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Pakistan to launch digital rupee to stabilize economy

source-logo  invezz.com 19 September 2023 08:02, UTC

Pakistan‘s government plans to introduce digital cash to alleviate currency printing costs as the country faces economic turmoil amid heightened inflation. The proposed currency will help bolster the rupee and ensure robust financial transactions.

The latest move comes as the government fights to improve the economy. The State Bank of Pakistan will support the digital money issuance on the government’s guarantee (similar to currency notes). The bank has been working with experts to launch a digital currency.

Also, invezz.com news shows SBP’s interest in virtual assets. While emphasizing on consumer protection, the bank acknowledged that crypto has a place in the future of finance.

The Central Bank Digital Currency (CBDC) department is evaluating the benefits of the digital rupee to ensure streamlined undertakings after its debut. While the government plans to replace currency notes gradually, they want to maintain the ratio of 20:80 (notes-digital cash) for security amidst any unforeseen situation in the future.

Further, digital currency will alleviate the expenses associated with printing notes, destroying old ones, and distributing cash to different cities. Utilizing blockchain will mean recording each transaction and supporting robust financial policies.

Also, digital currency might support international trade and improve remittance services. World Bank believes CBDCs will enhance the financial sector’s reliability, resilience, and efficiency.

Increasing CBDCs interest

Pakistan’s digital currency strategy adds to several nations navigating central bank digital currencies (CBDCs). Multiple countries are exploring the offerings, with several planning to introduce digital versions of their currency notes before decade-end.

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Nations continue to research CBDCs as they explore financial technology. China leads in the front as Russia plans to launch its digital currency in 2024. Meanwhile, the United States and UK will launch their central bank digital currencies by 2030.

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