Pakistan has launched a trial program for its national digital currency, building on the country’s recent comprehensive digital transformation initiative that integrates digital IDs with financial services. The initiative marks a significant step in modernizing Pakistan’s financial system and increasing financial inclusion, particularly as the country works to serve approximately 7 million citizens who currently lack formal identification documents.
The trial program focuses on enabling cashless transactions and facilitating more secure and efficient payments through Pakistan’s National Database and Registration Authority (NADRA), which has recently implemented enhanced security features for digital identity protection. The digital currency system will use the country’s existing digital identity infrastructure, including the Pak-ID mobile app, which already provides citizens with digital identity services and real-time application tracking.
Alongside this initiative, Pakistan is implementing new regulatory frameworks for cryptocurrencies and digital assets. The government has approved security standards for cryptographic and IT security devices, scheduled to take effect by June 2028. The standards were developed by the Pakistan Standards and Quality Control Authority (PSQCA) with recommendations from the National Telecom and Information Technology Security Board (NTISB).
The new regulatory framework establishes four security levels for device classification and requires mandatory vulnerability inspections. Developers must obtain NTISB approval before deploying new technologies. The regulations will affect various institutions, including NADRA, Civil Aviation Authority, and law enforcement agencies. The framework emphasizes cybersecurity principles of confidentiality, integrity, and availability, and includes provisions for phasing out outdated devices.
Pakistan’s digital currency development occurs amid broader global trends in financial technology integration and follows the country’s recent launch of its first QR-based digital identity system. While implementing its domestic program, Pakistan is monitoring international developments in fintech regulation, including models such as Industrial Loan Company (ILC) charters in the United States, which enable fintech and crypto-native firms to operate with banking capabilities under federal oversight.
Sources: ProPakistani, GAD Insider, PhoneWorld, Forvis Mazars
