Pakistan Pilots CBDC with Japanese Blockchain Firm Soramitsu
Pakistan Teams Up with Soramitsu for CBDC Pilot
Pakistan is advancing its digital currency initiatives through a collaboration with Soramitsu, a Tokyo-based blockchain developer. The State Bank of Pakistan (SBP) aims to pilot a central bank digital currency (CBDC) by the end of 2025, leveraging Soramitsu's expertise in the field.
Soramitsu's previous work includes the development of Cambodia’s Bakong digital currency, highlighting its capabilities in deploying digital assets to modernize financial systems in emerging markets.
Soramitsu's Role in Asian CBDC Development
Funded in part by Japan’s Ministry of Economy, Trade, and Industry, the pilot program seeks to address financial challenges stemming from Pakistan’s reliance on cash transactions, according to a Nikkei report. The initiative targets lowering the costs linked to cash circulation and boosting financial inclusion rates.
Masato Toriya, a Pakistan specialist at Tokyo University of Foreign Studies, noted the prevalence of cash-based transactions in rural areas and the low rate of bank account ownership. The introduction of a CBDC aims to mitigate these issues.
Soramitsu has a proven track record in the CBDC space, having co-developed Cambodia’s Bakong. The Pakistan project represents its largest undertaking to date, targeting a population of 250 million and an economy valued at around $400 billion.
The firm is also developing offline CBDC functionality, enabling digital currency transactions via smartphones without continuous internet access. This could be crucial for developing economies with inconsistent connectivity.
Pakistan's Broader Digital Asset Strategy
SBP Governor Jameel Ahmad stated that the central bank is finalizing virtual asset regulations and preparing for the CBDC pilot launch. He emphasized Pakistan’s dedication to developing its digital currency capabilities and establishing a regulatory framework for virtual asset licensing at the Reuters NEXT Asia summit in Singapore.
Pakistan is also working to integrate cryptocurrency into its financial infrastructure. The government-backed Pakistan Crypto Council is promoting virtual asset adoption and exploring initiatives such as bitcoin mining using surplus energy. The council is engaging with international crypto firms, including Binance, to foster digital asset development.
While virtual assets are currently unlicensed, the SBP has clarified that they are not illegal, advising financial institutions to await regulatory frameworks before engaging with them. As Pakistan explores new financial technologies, platforms like Codeum can provide essential security audits and KYC solutions to ensure safe and compliant adoption of digital assets.