January 28, 2025 – In a recent media briefing, Jameel Ahmad, the Governor of the State Bank of Pakistan (SBP), provided key insights into the central bank’s plans to introduce new currency notes, a central bank digital currency (CBDC), and a new investment platform to boost public participation in government securities. His remarks came after the SBP decided to cut its benchmark interest rate by 100 basis points (bps) to 12%, signaling a commitment to improving economic conditions and enhancing financial inclusion.
Ahmad revealed that the SBP is in the process of launching new design currency notes. However, the design is still awaiting final approval, with a cabinet decision expected in the next two to three months. He explained that the process of issuing these new notes would be gradual, but the exact denomination to be released first has not yet been disclosed. “All currency notes will be issued gradually, but we are still in the final stages of approval,” Ahmad stated, emphasizing the extensive process behind creating new currency designs.
In addition to the new currency notes, Ahmad also addressed the ongoing efforts to introduce Pakistan’s first central bank digital currency (CBDC). The SBP has been actively studying global developments and technological frameworks around digital currencies, with plans to build the necessary regulatory and technical infrastructure. He highlighted that a bill to establish a legal framework for the CBDC is currently under government consideration. “We are in the process of strengthening our capacity building, as this is a highly technical subject,” Ahmad remarked. The SBP is working to ensure that the regulatory requirements and safeguards surrounding the CBDC align with international standards, taking into account the experiences of other central banks.
If the bill for the CBDC is passed, the SBP plans to implement the digital currency in phases. This move is part of Pakistan’s broader efforts to modernize its financial system and keep pace with the rapidly evolving digital economy.
Another significant development highlighted by Ahmad was the recent introduction of the “Virtual Assets Bill 2025,” a private member’s bill aimed at regulating the burgeoning digital asset market, including cryptocurrencies and blockchain technologies. This bill is seen as a critical step towards laying the groundwork for a digital rupee, pegged to the Pakistani rupee and governed by the central bank. The government’s forward-thinking approach in regulating digital assets is expected to create a robust framework for this fast-growing sector.
When asked about the banking sector’s progress on adhering to the constitutional deadline for eliminating interest-based (riba) transactions by January 2028, Ahmad confirmed that the SBP has already implemented a Sharia governance framework and auditing processes. The SBP is collaborating closely with the banking industry and has established a steering committee to guide the transition of conventional banks to Islamic banking practices. Ahmad also noted that there is strong demand for sukuk (Islamic bonds) in the market, though the current volume remains low. He explained that Pakistan’s sukuk structure is predominantly asset-based, which requires sufficient collateral from the government to back these instruments. The SBP is exploring the introduction of an asset-light sukuk structure, inspired by practices in other countries.
In line with these developments, Ahmad announced the upcoming launch of a new investment platform called Invest Pak. The platform aims to allow individuals and corporations to directly invest in government securities, such as Treasury bills and Pakistan Investment Bonds, through an Investor Portfolio Securities (IPS) account. The platform is currently undergoing testing, and once launched, it will be available to all individuals and corporations with a bank account. This initiative is expected to enhance public participation in government securities and improve access to investment opportunities, driving a more inclusive and accessible financial ecosystem in Pakistan.
With these initiatives, the SBP is positioning itself to modernize the country’s financial infrastructure and ensure Pakistan remains competitive in the global financial landscape. The gradual rollout of new currency notes, the introduction of a CBDC, and the Invest Pak platform represent major steps toward enhancing Pakistan’s financial system, driving economic growth, and fostering greater financial inclusion.