Experts have highlighted the risks facing Pakistan’s nascent digital asset industry, citing a lack of clear regulation and consumer protection for investors.
A keynote speaker at the Sustainable Development Policy Institute (SDPI) conference revealed that Pakistan could potentially reach $300 billion in digital asset trading volume. As background, the country’s gross domestic product (GDP) has reached $400 billion, and digital assets offer many economic opportunities to developing countries.
However, Pakistan Bankers Association (PBA) Chairman Zafar Masood has made it clear that delays in rolling out a comprehensive legal framework will cost the country $25 billion in economic opportunities. In his keynote address, Masoud advocated for a measured and gradual approach to developing a regulatory strategy for the industry’s service providers.
PBA officials added that the proposed regulations should emphasize cybersecurity and consumer protection while introducing clear licensing requirements. Alongside promoting watertight regulations, Masoud recommended the introduction of a central bank digital currency (CBDC) to reduce cross-border transfer fees.
Masood did not specify whether it would be a retail or wholesale version, but in his keynote speech he advocated for a “rupee stablecoin,” citing the industry’s tremendous growth. He cited new US stablecoin regulations and increasing use cases in the financial sector as reasons for Pakistan to “seriously consider” this offering.
Meanwhile, Singapore-based financial expert Yara Wu expressed her preference for CBDC, noting that services with cross-border capabilities would reduce the high costs associated with remittances. Both Wu and Masoud warned that despite the benefits of financial inclusion, CBDCs could face regulatory ambiguity and cybersecurity challenges.
Faisal Mazhar, deputy director of payments at the State Bank of Pakistan, said the central bank is leaning on the World Bank and the International Monetary Fund (IMF) to launch a CBDC prototype. Mazar confirmed the upcoming pilot scheme ahead of full implementation as the country demonstrates its commitment to improving the payments environment.
Rapidly progressing digitalization
Since the beginning of this year, Pakistan has crossed several significant milestones in its pursuit of digitalisation. A central bank study revealed that digital payments have surged in the past 12 months, accounting for 88% of all retail transactions in the country.
A major government initiative has expanded the reach of digital wallets to remote areas of Pakistan as transaction volumes soar. In mid-2025, the country announced the establishment of a new regulatory body for digital asset oversight, which will open a license application window for digital asset exchange operators worldwide.
Digital payments are on the rise in Pakistan
The head of government, who remains in Pakistan, expressed a strong intention to develop initiatives to phase out cash-based payments and accelerate the transition to digital transactions.
Prime Minister Shehbaz Sharif reiterated his commitment to accelerate cashless transactions in the country at a high-level meeting with financial sector regulators and service providers. Sharif pointed out that the big leap towards digital payments is a step towards improved governance and sustainable development in Pakistan.
He directed authorities to launch awareness campaigns in rural areas to highlight the benefits of cashless transactions. Passionate about improving financial inclusion, the awareness program aims to improve digital wallet coverage and build resilience and convenience from crises.
“The entire world is moving towards a digital economy and Pakistan has to move along with it,” Sharif said.
The Prime Minister revealed that the attempt to move towards a cashless economy early has brought early benefits to Pakistan. New data reveals that RAAST QR codes enable digital payment of utility bills amounting to billions of rupees and the Benazir Income Support Program (BISP) was used to dramatically increase the volume of cashless payments.
Additionally, the government aims to issue operational licenses to digital banks in Pakistan to provide financial services to over 70% of the population.
The authorities briefed the Prime Minister on the integration status of mobile government service apps and RAAST QR codes. Representatives from the Ministry of Finance, Ministry of IT, State Bank of Pakistan, NADRA and FBR made presentations and Prime Minister Sharif was satisfied with the “satisfactory progress”.
Mr. Sharif urged government agencies not to rely on oars and mandated them to achieve digitalization targets within set deadlines, as similar initiatives are undertaken in the region.
See: The importance of digitalization for businesses
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