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Pakistan and digital currency: Is this becoming the new trend?

Pakistan aims for digital currency as they embark on research.

Governor Reza Baqir|

It is no news that central banks around the world are working to introduce their digital currency. This includes central banks like the People's Bank of China, the Bank of Japan and the European Central Bank.

Pakistan also likes the idea, and a digital currency might be available in the country in a few months.

"We hope to be able to make some announcement on that (digital currency) in the coming months. For now, we have allowed a framework for digital banks to begin operating in Pakistan." Governor Reza Baqir.

The country has embarked on a study to pave the way for introducing its digital currency like the famous bitcoin cryptocurrency to expand banking facilities to the financially excluded and be a step further in the fight against money laundering and terror financing.

"We are studying it (introduction of a digital currency by the central bank) very carefully," State Bank of Pakistan (SBP) Governor Reza Baqir in a recent interview with the international media outlet CNN.

The benefits of the adoption of a digital currency in currency come with a lot of benefits. One of the apparent benefits tends to wipe out corruption in Pakistan.

"The benefit of that is twofold; not only that will give another boost to our efforts for financial inclusion, but also because it's a central bank-issued digital currency. It will allow us to make further progress in our fight against money laundering and terrorism financing." Reza Baqir.

Other benefits of the digital currency

Documentation of every financial transaction enables authorities to track who pays money to whom and for what purpose.

Government offices can also utilise the digital currency for making payments among different ministries, by the federal government to provincial administrations and by the provincial governments to local and district administrations and other government departments.

The adoption of virtual currency – which is saved in computers and on mobile phone wallets, unlike the physical currency and coins – will help the government in its drive against will help the government in its campaign against money laundering and terror financing.

Pakistan's digital economy in focus

Pakistan has a total of 180 million mobile phone connections in a population of 208 million. Pakistan Telecommunication Authority (PTA).

More than half of them (95 million) use the advanced 3G/4G internet. (PTA).