The Pakistani government has proposed amendments to the State Bank of Pakistan (SBP) Act to recognize central bank digital currencies ( CBDCs) as legal tender. These changes would authorize the central bank to issue, regulate, and manage digital currency in both digital and physical forms. The amendments expand Section 24 to include digital issuance alongside traditional banknotes, defining digital currency as “a digital form of currency issued by the bank under section 24 as legal tender under section 25.” Section 24 gives the SBP the authority to issue currency, and Section 25 designates it as legal tender.
Pakistan Digital Currency Reforms Set Path for CBDC as Legal Tender
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To deter unauthorized issuance, the amendments introduce fines amounting to twice the value of any illegal digital currency. Additionally, the proposal removes restrictions on dual nationals holding high-level positions within the SBP, reversing a rule established under International Monetary Fund (IMF) guidance in 2022. The amendments also extend board powers to approve major financial reports and streamline governance by updating meeting protocols for the board chairperson and non-executive directors.
