Pakistan’s central bank is exploring its own digital coin, the Governor, State Bank of Pakistan Reza Baqir revealed in an interview on Thursday after China became the first major economy in the world to create its own digital currency.
Expressing his views on a central bank-issued digital currency, Baqir said, “we are at a stage where we are studying it. We hope to be able to make some announcement on that in the coming months.”
The SBP governor told that they have allowed a framework for digital banks to begin their operations in Pakistan. These are the banks, which don’t have a brick and mortar presence and are purely digital like challenger banks or neo banks.
The SBP governor said they are studying it (SBP’s own digital currency) as some countries such as China are already showing the way it benefits central banks.
It will not only boost the central bank efforts for financial inclusion but also allow it to make progress in its fight towards anti-money laundering and countering terrorism financing, he added.
Baqir didn’t share any details about the SBP’s own digital currency, but he said Pakistan is open to digital innovation.
“Stripe and other big payment providers are very welcome in Pakistan. It’s a market that’s waiting to burst as far as digitization is concerned,” the governor said while responding to a question on Fintechs.
Explaining he said when the SBP eliminated the IBFT fee in response to the Covid-19 pandemic, its impact was phenomenal. “For the quarter that ended in December, we had a growth of about 150% to 200% compared to a year ago on mobile banking transactions. For internet banking transactions that number is around a 100% to 150% growth.”
Pakistan is a market that is home to the fifth-largest concentration of people. They are young and tech-savvy that are very fertile for such digital innovation, he added.
Earlier this week, China created its own digital currency, a cyber yuan, which is controlled by its central bank that will issue this virtual money.