The federal government of Pakistan is poised to make significant changes to the State Bank of Pakistan (SBP) Act, with a series of proposed amendments that aim to allow dual nationals to hold key positions within the central bank and legalize the use of digital currencies, including cryptocurrencies like Bitcoin. This initiative marks a pivotal shift in the government’s approach to financial policy.
Sources from the finance ministry indicate that around a dozen amendments have been drafted and reviewed by the Ministry of Law. These changes are now set to be submitted to the federal cabinet for approval, highlighting a proactive strategy in modernizing Pakistan’s financial governance.
One of the core amendments clarifies that digital currency will be issued by the SBP, empowering the central bank to manage the nation’s currency in both physical and digital forms. This development paves the way for the formal recognition and regulation of digital currencies, a sector that has seen rapid growth and interest globally.
In a related move, the SBP is planning to establish a dedicated subsidiary focused on developing and managing advanced digital payment systems. This initiative aims to enhance financial efficiency and accessibility across the nation, catering to the evolving needs of the economy and consumers.
Another notable amendment is the proposal to lift the ban on dual nationals from serving as governors, deputy governors, and non-executive directors on the SBP board. This restriction, which was implemented in January 2022 under IMF-influenced amendments, did not receive specific recommendations from the IMF. By allowing dual nationals to hold these crucial positions, the government aims to leverage diverse expertise and perspectives in financial governance.
For the first time, the proposed amendments introduce legal provisions for digital currency in the SBP Act, signaling a departure from the central bank’s historically cautious stance on digital assets. Previously, the SBP had issued public advisories warning against the use of cryptocurrencies. The new amendments also propose penalties for unauthorized issuance of digital currencies, aiming to create a more structured regulatory framework for this emerging sector.
In addition to addressing digital currency, the amendments seek to improve the governance of the SBP board by granting it greater authority in approving financial reports and clarifying procedures for convening board meetings. These changes could enhance the overall efficiency and transparency of the central bank’s operations.
If approved, these amendments could significantly transform the landscape of financial governance and digital currency utilization in Pakistan. The proposed changes not only aim to foster innovation and economic growth but also reflect a broader recognition of the importance of adapting to the rapidly evolving global financial environment. As the country moves toward a more inclusive and digitally-oriented financial system, these developments could open new avenues for economic opportunity and advancement.
November 2024, Cryptoniteuae