Experts have highlighted the risks facing Pakistan’s emerging digital asset industry, citing the absence of clear regulations and consumer protections for investors.
Keynote speakers at the Sustainable Development Policy Institute (SDPI) Conference revealed that Pakistan could achieve $300 billion in potential digital asset trading volume. For context, the country’s gross domestic product (GDP) sits at $400 billion, with digital assets offering a raft of economic opportunities for the developing nation.
However, Pakistan Banks Association (PBA) President Zafar Masud disclosed that delays in rolling out a comprehensive legal framework will cost the country $25 billion in economic opportunities. Masud, in his keynote address, made a case for a cautious and phased approach toward the development of a regulatory playbook for service providers in the industry.
The PBA official added that the proposed regulation should place a premium on cybersecurity and consumer protection while introducing clear licensing requirements. Alongside the push for watertight regulations, Masud recommended the roll-out of a central bank digital currency (CBDC) to reduce cross-border transfer fees.
While Masud did not specify for a retail or wholesale version, his keynote address argued in favor of a “rupee stablecoin,” citing the meteoric growth of the industry. He pointed to new stablecoin regulation in the United States and growing use cases in finance as reasons for Pakistan to “seriously consider” the offering.
Meanwhile, Singapore-based financial expert Yara Wu indicated a preference for CBDCs, noting that an offering with cross-border functionalities will reduce the steep costs associated with remittances. Both Wu and Masud warned that despite the financial inclusion benefits, CBDCs can face regulatory ambiguities and cybersecurity challenges.
Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, disclosed that the central bank is leaning on the World Bank and the International Monetary Fund (IMF) to launch a CBDC prototype. Mazhar confirmed plans for an incoming pilot ahead of full implementation as the country signals a commitment to improve its payment landscape.
A hot streak of digitization
Since the start of the year, Pakistan has crossed several significant milestones in the quest for digitization. A review by the central bank revealed that digital payments have surged over the last 12 months, accounting for 88% of all retail transactions in the country.
Amid the soaring volumes, digital wallet coverage has expanded to remote regions of Pakistan, driven by key government initiatives. In mid-2025, the country announced a new regulatory body for digital asset oversight, with the authority opening the window for global digital asset exchange operators to apply for licenses.
Digital payments rise in Pakistan
Still in Pakistan, the head of the government has signaled a keen intention to phase out cash-based payments, rolling out initiatives to power the transition to digital transactions.
Prime Minister Shehbaz Sharif reiterated a commitment to accelerate cashless transactions in the country during a high-level meeting with financial sector regulators and service providers. Sharif noted that the big leap toward digital payments is a step toward improved governance and sustainable development for Pakistan.
He directed authorities to launch awareness campaigns in rural areas to highlight the benefits of cashless transactions. Keen on improving financial inclusion, the awareness programs will aim to improve coverage for digital wallets, building crisis resilience, and convenience.
“The entire world is moving towards a digital economy, and Pakistan must move forward alongside it,” said Sharif.
The premier revealed that early attempts to transition to a cashless economy have yielded early benefits for Pakistan. New data disclosed that RAAST QR codes have enabled digital payments for utility bills running into billions of rupees, with the Benazir Income Support Programme (BISP) tapped to jolt cashless payment volumes.
Furthermore, the government has issued operational licenses to digital banks in Pakistan, tipped to provide financial services to over 70% of the population.
Authorities briefed the prime minister on the status of the integration of mobile government service apps with the RAAST QR codes. Representatives from the Ministry of Finance, IT Ministry, the State Bank of Pakistan, NADRA, and FBR made presentations, with Sharif pleased with the “satisfactory progress.”
Urging the agencies not to rest on their oars, Sharif mandated agencies to meet their digitization targets within stipulated timelines amid similar regional efforts.
Watch: Importance of digitalization for enterprises
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