State Bank teams up with Japan’s Soramitsu to test a central bank digital currency aimed at boosting financial inclusion and cutting cash dependency.
Pakistan Enters the Digital Currency Era
In a landmark move toward modernizing its financial ecosystem, Pakistan is preparing to launch its first-ever central bank digital currency (CBDC) pilot—commonly referred to as the “digital rupee”—later this year. The initiative is being led by the State Bank of Pakistan (SBP) in collaboration with Soramitsu, a Japanese blockchain technology company known for its work on digital currency platforms.
The pilot project will operate on Soramitsu’s CBDC framework and is funded by Japan’s Ministry of Economy, Trade and Industry under its Global South Future-Oriented Co-Creation Project. The aim is to assess the feasibility of a national digital currency that could revolutionize payment systems, promote financial inclusion, and improve the efficiency of Pakistan’s economy.
Why the Digital Rupee Matters
SBP Governor Jameel Ahmad confirmed last month that the central bank is “building up capacity” to implement a digital currency. The move comes as Pakistan continues to grapple with the challenges of a largely cash-dependent society, particularly in rural areas where formal banking access is limited. According to experts, a well-designed CBDC could make everyday transactions easier, reduce reliance on physical cash, and lower the logistical costs of cash distribution.
Masato Toriya, associate professor at Tokyo University of Foreign Studies, stressed that much of rural Pakistan still depends on physical money, with low rates of bank account ownership. Introducing a CBDC could help bridge that gap, bringing millions of unbanked citizens into the formal financial system.
Learning from Global Successes
Soramitsu brings extensive experience in digital currency deployment. The company played a central role in developing Cambodia’s Bakong CBDC, which has gained international recognition for enabling both banked and unbanked populations to transact easily. It has also piloted similar systems in Papua New Guinea and the Solomon Islands.
Earlier this year, a joint SBP–Soramitsu delegation visited the National Bank of Cambodia to study its CBDC model. While Pakistan’s GDP—around $400 billion—is eight times larger than Cambodia’s, the SBP hopes to adapt proven elements of Cambodia’s system to meet Pakistan’s needs.
Technology Designed for Pakistan’s Realities
One standout feature of Soramitsu’s approach is offline transaction capability. This allows digital payments to be processed via smartphones without internet connectivity—an essential feature for Pakistan, where mobile penetration is growing but reliable internet access and electricity supply remain inconsistent.
Broader Economic and Geopolitical Context
The CBDC initiative comes at a time when Pakistan is expanding economic cooperation with China through the China–Pakistan Economic Corridor (CPEC), part of Beijing’s Belt and Road Initiative. While China has already experimented with its own digital yuan, Pakistan’s adoption of a CBDC could help maintain monetary autonomy while benefiting from regional trade integration.
Looking Ahead
The pilot program will test both the technical and social aspects of CBDC adoption, from cybersecurity and transaction speed to user accessibility and trust. If the trial proves successful, Pakistan could proceed with a nationwide rollout in the coming years—potentially positioning itself as a digital finance leader among emerging economies.