KARACHI: On Thursday, State Bank Governor Reza Baqir said that the central bank is looking into digital currency.
In response to a CNN query about digital currency in Pakistan, the SBP governor said, “We are researching,” and went on to list financial inclusion, money laundering prevention, and counter-terrorism initiatives as potential benefits. This is the first time the SBP has confirmed that digital currency is being investigated. Previously, all digital currencies were rejected for exchange and payments.
The SBP is keeping a close eye on China’s foray into digital currency. China is attempting to encourage digital currency, but developed-country central banks are opposing the change. There are claims that Beijing wants to use digital currency to conquer the financial world. However, digital currency adoption in China is still minimal.
Pakistan’s financial sector anticipates a digital currency policy, but it is unclear what the extent and outcome of the change will be.
The digital currency has long been a sensitive topic for central banks worldwide, but Elon Musk’s latest announcement — “You can now purchase a Tesla with bitcoin” — has only reinforced that position. Digital money, on the other hand, has yet to gain traction in the financial world.
In response to another query, the SBP governor stated that cash is often associated with corruption, so Raast (which means “direct”) has been adopted as a payment method.
Raast was implemented to speed up the payment process. According to him, the module used is similar to that used in Singapore and other countries. Raast will assist in increasing cash movement through digital means.
Financial inclusion has been our most challenging obstacle. Only one out of every two citizens has a bank account, and only one out of every five has a bank account. According to him, the ratio is lacking in comparison to the rest of the country and Asia.
The State Bank has made swift decisions in the aftermath of Covid-19, he said, adding that targeted facilities have been provided in the health and construction sectors.