SBP Taps Soramitsu for CBDC Development
The State Bank of Pakistan (SBP) has appointed Japanese blockchain developer Soramitsu to design and implement the country’s central bank digital currency (CBDC), Dawn reported, citing Japanese media sources. The announcement follows the federal government’s approval of the landmark Virtual Assets Act 2025, which lays the foundation for regulating and integrating digital assets into Pakistan’s financial system.
Soramitsu, known for its blockchain expertise and involvement in CBDC projects in other countries, will collaborate with the SBP on a pilot program to introduce the digital currency. This initiative is seen as a major step in Pakistan’s ongoing efforts to modernize its banking infrastructure and embrace financial innovation.
Virtual Assets Act 2025 — A New Regulatory Framework
Approved on July 9, the Virtual Assets Act 2025 establishes the Pakistan Virtual Asset Regulatory Authority (PVARA) as an independent federal body. PVARA will be responsible for licensing, supervising, and enforcing compliance among virtual asset service providers operating in the country.
Under the new law, all service providers must obtain licences, meet incorporation requirements, and adhere to strict compliance and reporting standards. This includes implementing robust security measures, anti-money laundering protocols, and customer verification procedures.
The Act also introduces a regulatory sandbox — a controlled testing environment where innovative financial products and services can be trialed before full-scale launch. This measure is designed to encourage technological advancements while minimizing risks to the financial system. PVARA will also have the authority to grant limited exemptions under defined circumstances, allowing for flexibility as the market evolves.
Safeguarding Islamic Finance Principles
In a move to align digital asset operations with Pakistan’s Islamic finance framework, the law mandates the creation of a Shariah advisory committee. This body will review CBDC policies and other virtual asset-related activities to ensure they comply with Shariah principles.
Additionally, an appellate tribunal will be set up to handle appeals and disputes arising from PVARA’s decisions. This mechanism aims to ensure transparency, fairness, and accountability in the regulatory process.
Pakistan’s CBDC Journey So Far
Pakistan’s interest in CBDCs is not new. The SBP began exploring the idea in 2021 as part of its banking digitisation roadmap, which seeks to enhance financial inclusion, improve payment efficiency, and reduce reliance on cash.
In recent months, government agencies have intensified consultations with banking executives, currency dealers, and technology experts to evaluate the potential benefits and risks of digital currency adoption. These discussions have focused on topics such as cybersecurity, transaction transparency, and integration with existing banking systems.
Opportunities and Challenges Ahead
The launch of a CBDC could bring multiple benefits to Pakistan’s economy. A well-designed digital currency can:
- Improve payment speed and efficiency
- Reduce transaction costs
- Enhance financial inclusion by reaching unbanked populations
- Increase transparency and combat illicit financial activities
However, experts remain divided on the long-term viability of CBDCs. Critics caution about risks such as cybersecurity threats, potential disruption to commercial banks, and the need for robust infrastructure to handle nationwide adoption.
Pakistan’s regulatory approach — combining licensing, sandbox testing, and Shariah compliance — is intended to address these concerns while enabling innovation.
Global Context
CBDCs are gaining traction worldwide, with countries like China, Nigeria, and the Bahamas already piloting or launching their own digital currencies. Japan, too, is actively exploring digital yen initiatives, making Soramitsu’s involvement in Pakistan’s project particularly notable.
For Pakistan, partnering with an experienced foreign developer could accelerate the learning curve and ensure that the CBDC aligns with international best practices. At the same time, local adaptation will be crucial to address Pakistan-specific needs and regulatory requirements.
Looking Ahead
The pilot program with Soramitsu marks the beginning of a critical phase in Pakistan’s CBDC journey. While no official launch date has been announced, industry observers expect the testing phase to provide valuable insights into technical feasibility, user adoption, and regulatory oversight.
If successful, the project could position Pakistan as a regional leader in digital financial innovation — but its ultimate success will depend on balancing innovation with security, compliance, and public trust.
As Pakistan moves forward, the SBP, PVARA, and technology partners like Soramitsu will play pivotal roles in shaping a digital currency ecosystem that supports economic growth while safeguarding financial stability.
