Pakistan is preparing to test its first central bank digital currency (CBDC) later this year, partnering with Japanese blockchain company Soramitsu. The pilot aims to introduce a digital version of the Pakistani rupee, leveraging Soramitsu’s CBDC platform. The initiative is supported by Japan’s Ministry of Economy, Trade, and Industry through the Global South Future-Oriented Co-Creation Project, highlighting growing international collaboration in digital finance.
A Step Toward a Cashless Economy
State Bank of Pakistan (SBP) Governor Jameel Ahmad confirmed the central bank is actively “building up our capacity” to implement a digital currency. Experts note that a CBDC could be transformative for Pakistan’s largely cash-driven economy. Masato Toriya, associate professor at Tokyo University of Foreign Studies, pointed out that in rural areas, cash remains dominant and bank account ownership is limited. A digital rupee could significantly reduce the costs and logistical challenges associated with distributing physical cash.
Soramitsu’s Track Record in CBDC Projects
Soramitsu is no stranger to central bank digital currency initiatives. The company played a key role in developing Cambodia’s Bakong system and has conducted CBDC pilots in Papua New Guinea and the Solomon Islands. In preparation for the Pakistan project, officials from SBP and Soramitsu visited Cambodia earlier this year to study its digital currency operations.
Scale and Strategic Significance
With a population of 250 million and a GDP around $400 billion, Pakistan represents Soramitsu’s largest CBDC project to date—eight times larger than Cambodia’s economy. The initiative also has a geopolitical dimension. As Pakistan deepens economic ties with China through the China-Pakistan Economic Corridor, introducing its own digital currency could help the country maintain financial autonomy while navigating regional economic influences.
Adapting to Local Challenges
Pakistan’s uneven internet connectivity and electricity supply pose unique challenges for a digital currency rollout. To address this, Soramitsu is developing offline CBDC functionality, allowing transactions via smartphones even without internet access. This innovation could serve as a model for other developing countries facing similar infrastructure constraints.
