Karachi: In an effort to reduce the costs associated with currency printing and distribution, the government has made the decision to introduce a digital currency.
The introduction of this digital currency is expected to bring several benefits, including the appreciation of the rupee’s value, enhancement of the overall economy, and facilitation of extensive financial transactions.
This digital currency will be equivalent in value to the Pakistani rupee, similar to the Chinese digital currency, which is pegged to the Chinese Yuan. The State Bank of Pakistan is supporting this initiative, and the digital currency will be issued with the government’s guarantee, much like traditional currency notes. The SBP has initiated efforts to implement the digital currency and has enlisted the expertise of professionals for this purpose.
A specialized department, known as the Central Bank Digital Currency, is currently conducting a cost-benefit analysis and feasibility assessment of the digital currency to ensure smooth transactions once it is launched.
The government intends to gradually replace physical currency notes with digital currency while maintaining a parallel existence of both forms at an 80:20 ratio. This arrangement ensures that traditional currency notes remain available in case of unforeseen circumstances.
The adoption of digital currency will not only save costs related to the printing and distribution of physical currency but also enable the documentation of every transaction, thereby enhancing the effectiveness of monetary policy enforcement.