The stablecoin hype that gained momentum in the West earlier this year has seemingly breezed towards Asia. Fresh reports emerging from Pakistan suggest that the country is considering charting a stablecoin course in order to modernize its present economic and financial ecosystem.
Zafar Masud, the president of the Pakistan Bank Association has claimed that the country is “seriously considering” a Pakistani rupee-backed stablecoin.
Stablecoins are crypto assets that derive their values from underlying reserve assets like fiat currencies. Tether and USDC are the top two stablecoins, both pegged to the US dollar. These tokens essentially maintain their value in a 1:1 ratio with the underlying assets.
A report in Pakistan’s Daily Times, citing Masud, said that the stablecoin being considered is expected to boost financial inclusion in the nation. Data by the State Bank of Pakistan claims that 53 percent of Pakistan’s total adult population of around 240 million, fall under the “unbanked” category. The country has reportedly been planning steps to increase its banking blanket to 75 percent of its population within the next three years.
With stablecoins, financial transactions such as cross-border settlements can be processed more efficiently in terms of time and cost, while also leaving a permanent log on the associated blockchain. U.S. President Donald Trump is viewing USD-backed stablecoins as a powerful tool in reinstating the USD dominance on the global financial fabric. Earlier this year, President Trump also signed the stablecoin-focussed GENIUS Act into law, clarifying the dos and don’ts for the issuers of these tokens.
Pakistan is also working on its Central Bank Digital Currency (CBDC) initiative. The State Bank of Pakistan is working to design a prototype of a CBDC under the guidance of the World Bank and the IMF. This token will be tested in a pilot phase first before seeing a wider roll out.
Pakistan has initiated multiple steps towards exploring the digital assets space this year. In June, it created the Pakistan Digital Assets Authority (PDAA) to manage areas like crypto licensing and tokenization. The country also launched the Pakistan Virtual Assets Regulatory Authority (PVARA) to oversee all crypto-related transactions.
The country is tapping into the crypto playbooks of El Salvador and the U.S. to finalize its own roadmap towards exploring the sector. At the time of writing, the exchange rate for the USD/PKR pair stood at 282.35 ($1= PKR 282.35).