State Bank of Pakistan offers a series of reforms; Crypto deals with legalization
The federal government has proposed to introduce a series of amendments to the State Bank of Pakistan (SBP) Act, which aims to allow dual citizens to hold key positions in the central bank and legalize the use of digital currencies, including cryptocurrencies such as Bitcoin.
The Ministry of Finance has proposed various reforms
According to government sources, the finance ministry has proposed about a dozen amendments and the law ministry has reviewed them. As the changes have been submitted to the federal cabinet for approval, this marks a major shift in the government's approach to fiscal policy.
The amendments clarify that digital currency will be issued by the SBP, which will allow the central bank to hold Pakistan's currency in physical and digital form.
SBP to open an independent subsidiary
Importantly, SBP is set to launch a subsidiary dedicated to inventing and managing advanced digital payment systems, which will increase financial efficiency and accessibility for all.
The proposed amendments will lift the ban on dual nationals serving as governors, deputy governors and non-executive directors on the State Bank of Pakistan (SBP) board. This limit was lifted in January 2022 due to IMF impact reforms, but the IMF did not specifically recommend it.
Legal provisions for the first time!
In a significant development, the proposed amendments introduce legal provisions for digital currency for the first time in the SBP Act. The change marks a shift from the State Bank of Pakistan's (SBP) historically cautious approach to digital currencies, which has previously cautioned against public advisories.
The reforms also include penalties for unauthorized digital currency issuance, aiming to more effectively regulate this emerging sector. Additional proposals aim to improve the governance of the SBP Board by giving it greater powers by approving financial reports and clarifying the procedures for calling board meetings.
These changes, if approved, could dramatically change financial management and the use of digital currency in Pakistan, creating new opportunities for economic growth and innovation.
