Pakistan is set to launch its first central bank digital currency (CBDC) pilot later this year in collaboration with Japanese blockchain technology firm Soramitsu. The initiative, reported by Nikkei Asia, aims to introduce a digital Pakistani rupee using Soramitsu’s CBDC platform. It is funded by Japan’s Ministry of Economy, Trade, and Industry under the Global South Future-Oriented Co-Creation Project. This move aligns with the State Bank of Pakistan’s (SBP) vision to strengthen digital finance infrastructure and reduce reliance on cash transactions.
The SBP Governor, Jameel Ahmad, recently confirmed that the central bank is “building up our capacity” for a digital currency. Masato Toriya, associate professor at Tokyo University of Foreign Studies, highlighted that rural Pakistan remains heavily cash-dependent, with limited bank account ownership. A CBDC could significantly lower the costs associated with cash distribution.
Soramitsu has prior experience in CBDC projects. It developed Cambodia’s Bakong system with the National Bank of Cambodia and has conducted pilots in Papua New Guinea and the Solomon Islands. In January, officials from SBP and Soramitsu visited Cambodia’s central bank to study its CBDC operations ahead of their project.
With a population of 250 million and a GDP of around $400 billion, Pakistan represents Soramitsu’s largest CBDC undertaking so far, being eight times bigger than Cambodia’s economy. The project also comes as Pakistan deepens economic ties with China through the China-Pakistan Economic Corridor, part of Beijing’s Belt and Road Initiative. While China has tested its digital yuan, Pakistan’s CBDC could help preserve financial independence and balance regional economic influence.
Given Pakistan’s inconsistent internet and electricity infrastructure, Soramitsu is also developing offline CBDC capabilities. This will allow smartphone transactions without internet access, potentially setting a model for other developing countries facing similar challenges.