Pakistan Signs New Laws To Ensure CBDC Launch By 2025
Amid the increased hype surrounding CBDCs, the State Bank of Pakistan (SBP) has signed new legislation for Electronic Money Institutions (EMIs). EMIs are non-banking entities that offer virtual payment instruments.
The new laws would ensure that Pakistan issues a CBDC latest by 2025. Meanwhile, regulators globally believe CBDCs have great potential.
They believe CBDCs will help enhance the existing fiat payment system by adopting the technology of nascent financial assets like crypto. Pakistan’s new regulations would help guide its central bank on its CBDC project.
According to local news media, Arab News, the World Bank assisted Pakistan in developing the latest regulations. Apart from timeline adherence for Pakistan’s CBDC launch, the regulations call for preventive measures to combat terror financing and money laundering.
The regulation also stresses the need to consider reporting requirements and consumer protection. Furthermore, the SBP will be in charge of issuing licenses to EMIs.
While making the announcement, Asad Umar, the country’s Finance Minister, said using EMIs is a good move. According to Umar, the EMIs will help promote the digital economy.
Additionally, it would protect financial firms from cyber-attacks from hackers. Furthermore, Jameel Ahmad, the SBP’s Deputy Governor, believes CBDCs can curb inefficiency and fiat-induced corruption.
Besides, the CBDC would allow for faster payment at lower costs. “These ground-breaking policies demonstrate the SBP’s dedication to openness, technological advancement, and its drive for financial digitalization,” Ahmad added.
India To Begin Retail CBDC Pilot Project
Following this recent move, Pakistan is now among the almost 100 nations actively working towards starting CBDC pilot projects. However, Pakistan is among many countries planning a potential CBDC launch.
India, Pakistan’s neighboring country, recently entered the race to introduce a retail CBDC. Last month, The RBI (Reserve Bank of India) unveiled its plan to commence a retail CBDC pilot project before this year ends.
This announcement came after the RBI finished testing its wholesale CBDC usage. Some participants of the upcoming digital Rupee retail project include ICICI Bank, Bank of Baroda, Yes Bank, Mahindra Bank, HDFC Bank, Union Bank of India, the State Bank of India, IDFC First Bank, and Kotak.
These participating banks will test the CBDC among a select group of users numbering between 10,000 and 50,000. Also, the financial institutions will work together with Bankit and PayNearby platforms for the integration of the new method of payment.
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