Pakistan Eyes Rupee Stablecoin as Experts Warn of $25 Billion Missed Opportunity

Pakistan is seriously considering launching its own rupee-backed stablecoin as financial experts warn the country could lose up to $25 billion in economic opportunities if it delays digital asset regulation.

The announcement came during the Sustainable Development Policy Institute Conference on November 8, 2025, marking a major shift in Pakistan’s approach to cryptocurrency.

Zafar Masud, President of the Pakistan Banks Association, told attendees that Pakistan could unlock between $20 billion and $25 billion in crypto-related growth by establishing clear rules for digital assets. He noted that global stablecoins processed approximately $27.6 trillion in transaction volume during 2024, highlighting the massive scale of the market.

A Digital Currency is Already in Development

Pakistan isn’t just talking about digital currency—it’s already building one. Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, confirmed that a Central Bank Digital Currency (CBDC) prototype is currently under development with help from the World Bank and International Monetary Fund. The central bank plans to run a pilot program before launching the digital rupee to the public.

The CBDC could dramatically reduce the cost of sending money into Pakistan from abroad. This matters because overseas remittances reached $30.25 billion in fiscal year 2024, making them a crucial part of Pakistan’s economy. A digital currency would allow people to send money home faster and cheaper than traditional banking systems.

Masud emphasized that Pakistan should start with stablecoins before moving to more complex digital assets. He stressed the importance of consumer protection and warned that cybersecurity remains a major challenge for the country’s digital finance plans.

Pakistan Ranks Third Globally in Crypto Adoption

Pakistan’s interest in digital currency isn’t coming out of nowhere. The country jumped six spots to rank third in Chainalysis’ 2025 Global Crypto Adoption Index, trailing only India and the United States. This ranking reflects how widely Pakistanis are already using cryptocurrency despite the lack of clear regulations.

The numbers tell an impressive story. Pakistan has over 40 million crypto users conducting more than $300 billion in annual trading. Experts estimate that Pakistanis have invested between $20 billion and $30 billion in crypto assets. Some projections suggest crypto trading by Pakistanis could eventually reach $300 billion—nearly matching the country’s entire GDP of roughly $400 billion.

What makes these figures even more striking is that over 100 million adults in Pakistan don’t have bank accounts. Out of a population of 240 million people, nearly half remain outside the traditional banking system. Stablecoins and digital currencies could give these people access to financial services for the first time.

New Rules Bring International Crypto Companies to Pakistan

Pakistan has moved quickly to create a legal framework for digital assets. In July 2025, the country passed the Virtual Assets Ordinance, which established the Pakistan Virtual Asset Regulatory Authority (PVARA). This new agency follows international standards set by groups like the Financial Action Task Force, International Monetary Fund, and World Bank.

In September 2025, PVARA began inviting international crypto exchanges and service providers to apply for licenses to operate in Pakistan. Only companies already licensed by major regulators like the U.S. Securities and Exchange Commission or UK Financial Conduct Authority can apply. This requirement aims to ensure that only reputable firms enter Pakistan’s market.

The timing of these regulatory moves aligns with increased private sector interest. ZAR, a fintech startup focused on bringing dollar-backed stablecoins to unbanked populations, recently raised $12.9 million in funding led by Andreessen Horowitz. Other investors included Dragonfly Capital, VanEck Ventures, and Coinbase Ventures. ZAR specifically targets Pakistan’s massive unbanked population with accessible stablecoin services.

Bitcoin Reserve and Mining Plans Face Scrutiny

Pakistan’s crypto ambitions extend beyond stablecoins and licensing. In May 2025, the country announced plans to create a strategic Bitcoin reserve at the Bitcoin 2025 conference in Las Vegas. Officials stated these Bitcoin holdings would never be sold, positioning them as a long-term strategic asset.

The government also allocated 2,000 megawatts of electricity for Bitcoin mining and AI data centers. If fully utilized, this amount of power could make Pakistan one of the top five Bitcoin mining locations worldwide. The plan aims to convert Pakistan’s surplus electricity into economic opportunity while creating jobs and attracting foreign investment.

However, not everyone supports these initiatives. The International Monetary Fund raised concerns about dedicating so much electricity to Bitcoin mining, questioning whether this makes sense given Pakistan’s ongoing energy challenges and financial pressures. The IMF wasn’t consulted before Pakistan made these announcements, potentially complicating ongoing negotiations with the international lender.

Balancing Innovation with Islamic Finance

Pakistan faces a unique challenge that many other countries don’t: ensuring crypto products comply with Islamic finance principles. The Virtual Assets Ordinance requires establishing a Shariah Advisory Committee to evaluate whether virtual asset offerings follow Islamic financial rules. This requirement reflects Pakistan’s need to balance technological innovation with religious and cultural values.

The country also must address cybersecurity risks and public skepticism about cryptocurrency. Masud acknowledged that “regulatory ambiguity and negative public perception” continue to be obstacles. Experts at the conference stressed the need for a cautious, phased approach to avoid the financial instability that hasty regulation could cause.

Despite these challenges, there’s broad agreement among Pakistani financial leaders that delay poses the greater risk. The Asia-Pacific region saw on-chain crypto activity grow 69% year-over-year, reaching $2.36 trillion in transactions. Pakistan, along with India and Vietnam, led this explosive growth. Missing this wave could mean losing competitive advantage to neighboring countries already moving faster on crypto adoption.

The Clock is Ticking

Pakistan stands at a crossroads in digital finance. The country has transformed from banning Bitcoin in 2018 to actively courting international crypto companies just seven years later. With third-place global ranking in crypto adoption, 40 million active users, and 100 million unbanked adults who could benefit from digital financial services, the opportunity is clear. The $25 billion question is whether Pakistan can move fast enough to capture it while building the regulatory safeguards needed for long-term success.