The State Bank of Pakistan (SBP) has established new legislation for Electronic Money Institutions (EMIs), non-bank organizations that provide digital payment instruments, in order to ensure the prompt issuance of a CBDC over the next three years.
According to Arab News, the World Bank assisted Pakistan in developing the new legislation.
The regulations require preventive measures against money laundering and terrorist financing, as well as consumer protection and reporting obligations, as well as timeline adherence for the CBDC’s debut.
The State Bank of Pakistan (SBP) will issue a license to EMIs, and non-bank companies, to issue e-Money for use in electronic payments.
Asad Umar, the country’s finance minister, emphasized the importance of protecting financial institutions from cybersecurity threats and lauded the introduction of electronic money institutions as a game changer for the development of e-commerce and a digital economy in the country.
Asad Umar stated:
“This new category of institutions will complement the efforts of the government in creating an enabling environment to empower stakeholders in trade and commerce. This will help businesses in improving their productivity and contribute toward positioning the nation for global competition.”
According to Jameel Ahmad, Deputy Governor of the SBP, the SBP is committed to transparency, the adoption of technology, and the digitization of Pakistan’s financial system.
He also stated that the SBP is becoming a modern, digital, and technology-focused bank.
According to him, the SBP aims to issue digital currency by 2025 in order to increase financial inclusion while reducing inefficiencies and corruption.
Financial analysts regarded the move as a “landmark in the FinTech field” and the SBP’s most forward-thinking action in recent memory.
Khurram Schehzad, a senior financial analyst stated:
“The launch of e-Money regulations…is a key landmark in our FinTech space. This way, Fintechs have been empowered to open and manage accounts themselves. This day is going to mark the inflection point for digital payments in Pakistan. We need this sort of speed and regulatory environment to set the ground for our FinTechs to flourish.”
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