EconomyPakistan

Pakistan Gears Up for Digital Currency Launch

In a strategic move to modernise its financial infrastructure, the Pakistani government is set to roll out a digital currency. This move aims not only to save the costs tied to printing and distributing traditional currency notes but also to bolster the rupee's strength in the market.

Mirroring the model of China, where one unit of digital currency is equivalent to one Chinese Yuan, Pakistan's digital currency will hold a value equal to the Pakistani rupee. With the backing of the State Bank of Pakistan (SBP), this digital currency will be introduced with the full guarantee of the government, similar to how physical currency notes are currently treated.

A special department, named the Central Bank Digital Currency, is spearheading this initiative at the SBP. They are diving deep into the pros and cons of this digital shift, ensuring that when the currency is launched, transactions remain seamless for its users.

However, the government remains cautious. Instead of a full transition to digital currency, they envision a system where digital and traditional notes coexist. The aim is for an 80:20 balance, with digital currency dominating but physical notes still available, ensuring a backup in any unpredictable circumstances.

The benefits of this digital shift are numerous. Apart from the obvious savings on the expenses linked to printing, distribution, and discarding of old notes, every digital transaction will be recorded. This means a more transparent system that can help execute monetary policies with precision.

There's also an international dimension to consider. With a digital currency in place, cross-border trades and investments might see an upswing. Moreover, those without conventional banking access can enter the financial fold.

A note from the World Bank reinforces the global trend towards digital currency. They point out the potential for a massive uplift in the efficiency, trustworthiness, and resilience of the financial industry, with technologies like blockchain leading the way.

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