The State Bank of Pakistan is backing this initiative, ensuring that the Pakistani digital currency carries the government's guarantee, much like traditional currency notes.
KARACHI: (UrduPoint/Pakistan Point News-Sept 19th, 2023) In a recent development, the government has announced plans to introduce a digital currency as part of its cost-saving measures.
This digital currency will be pegged to the Pakistani rupee, similar to the way one unit of Chinese digital currency corresponds to one Chinese Yuan.
The implementation of this digital currency is expected to yield multiple benefits, including reducing the expenses associated with printing and distributing physical currency. It is anticipated to contribute to the strengthening of the rupee, bolstering the national economy, and facilitating more extensive financial transactions.
The State Bank of Pakistan is backing this initiative, ensuring that the Pakistani digital currency carries the government's guarantee, much like traditional currency notes.
The State Bank of Pakistan has initiated the process and is enlisting the expertise of professionals in this endeavor.
A specialized department, known as the Central Bank Digital Currency, is currently conducting a thorough cost-benefit analysis and feasibility assessment for the smooth operation of the digital currency once it is launched.
Besides it, the introduction of digital currency holds promise for fostering cross-border trade and investment and providing financial services access to unbanked individuals.
The World Bank has also highlighted its potential to significantly enhance the efficiency, resilience, and reliability of the financial industry, with blockchain technology being a notable example of a distributed ledger system.
While the government envisions a gradual transition from physical currency to digital currency, it also intends to maintain a parallel system, with an 80:20 ratio, ensuring that traditional currency notes remain available as a backup in unforeseen circumstances.
Beyond the cost savings associated with eliminating the need for physical currency production and distribution, the digital currency will offer the advantage of comprehensive transaction documentation, enhancing the effectiveness of monetary policy enforcement.
