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The federal government has proposed introducing a series of amendments to the State Bank of Pakistan (SBP) Act, which aims to permit dual nationals to hold key positions within the central bank and legalize the use of digital currencies, including cryptocurrencies like Bitcoin.
Finance Ministry Proposes Various Amendments
According to government sources, the finance ministry has proposed about a dozen amendments, which the Ministry of Law has reviewed. With the changes being submitted to the federal cabinet for approval, this marks a significant shift in the government’s financial policy approach.
The amendments clarify that digital currency is issued by the SBP, enabling the central bank to handle Pakistan’s currency in both physical and digital forms.
SBP To Launch A Dedicated Subsidiary
Importantly, the SBP is poised to launch a subsidiary dedicated to innovating and managing advanced digital payment systems, which will enhance financial efficiency and accessibility for all.
The proposed amendments would lift the ban on dual nationals serving as governors, deputy governors, and non-executive directors on the State Bank of Pakistan (SBP) board. This restriction was enacted in January 2022 due to IMF-influenced amendments, but the IMF did not specifically recommend it.
Legal Provisions For The First Time!
In a significant development, the proposed amendments have introduced legal provisions for digital currency for the first time in the SBP Act. This change marks a shift away from the State Bank of Pakistan’s (SBP) historically cautious approach toward digital currencies, which it had previously cautioned against in public advisories.
The amendments also include penalties for the unauthorized issuance of digital currencies, with the aim of more effectively regulating this emerging sector. Additional Proposals aim to improve the governance of the SBP board by granting it greater authority in the approval of financial reports and clarifying the procedures for convening board meetings.
These changes, if approved, could significantly transform financial governance and digital currency use in Pakistan, potentially creating new opportunities for economic growth and innovation.