Pakistan Considers Rupee-Backed Stablecoin to Unlock $25 Billion Crypto Potential

• Pakistan Banks Association President Zafar Masud highlights potential $20-25 billion growth from cryptocurrency if regulations advance swiftly.

• A rupee-backed stablecoin could position Pakistan as a regional fintech leader by enhancing digital payments and remittance efficiency.

• With over 100 million unbanked adults, initiatives like the State Bank’s CBDC prototype aim to drive financial access, supported by IMF and World Bank expertise.

Pakistan eyes rupee-backed stablecoin launch to unlock $25B crypto opportunities and lead in fintech. Discover expert insights on regulation, adoption, and economic impact for 2025.

What is Pakistan’s Plan for a Rupee-Backed Stablecoin?

Pakistan’s plan for a rupee-backed stablecoin involves creating a digital currency pegged to the national currency to stabilize transactions and foster blockchain innovation. This initiative, discussed by banking leaders, aims to integrate digital assets into the economy while addressing regulatory gaps. Experts emphasize that timely action could unlock billions in investment, leveraging Pakistan’s youthful demographic and expanding digital infrastructure.

How Will a Rupee-Backed Stablecoin Impact Pakistan’s Economy?

A rupee-backed stablecoin could transform Pakistan’s financial landscape by reducing remittance costs, which currently exceed $30 billion annually, and providing stable value in volatile crypto markets. According to Zafar Masud, President of the Pakistan Banks Association, delaying regulation risks forfeiting $20 to $25 billion in potential economic growth from digital assets. This move aligns with global trends where stablecoins facilitate cross-border payments and financial inclusion for unbanked populations.

Masud, speaking at the Sustainable Development Policy Institute Conference, stressed the “massive opportunity” presented by Pakistan’s young population and burgeoning digital economy. He noted that blockchain solutions could drive innovation in fintech, positioning the country as a regional hub. Supporting data from local analyses indicate that crypto holdings among citizens already range from $20 billion to $30 billion, primarily through informal channels, underscoring the untapped potential.

Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, added that a Central Bank Digital Currency (CBDC) prototype is under development with input from the International Monetary Fund and the World Bank. This prototype focuses on enhancing financial service access and cutting transaction fees. Plans include a pilot phase to test scalability before full rollout, ensuring compliance with international standards.

In parallel, fintech efforts like those from startup ZAR seek to introduce dollar-backed stablecoins for everyday users, targeting financial inclusion for 240 million people, including over 100 million without bank accounts. Such developments could lower barriers to entry in digital finance, promoting broader economic participation. Masud acknowledged the global stablecoin market’s rapid expansion, valued at over $150 billion worldwide, as a key driver for Pakistan’s shift toward this technology.

Frequently Asked Questions

What Are the Benefits of a Rupee-Backed Stablecoin for Unbanked Pakistanis?

A rupee-backed stablecoin offers unbanked Pakistanis secure, low-cost access to digital payments and remittances without needing traditional bank accounts. It stabilizes value against crypto volatility and could reduce fees by up to 50%, enabling faster transfers for the 100 million adults currently excluded from formal finance, as per State Bank estimates.

Why Is Pakistan Prioritizing Stablecoin Regulation in 2025?

Pakistan is prioritizing stablecoin regulation in 2025 to harness its third-place ranking in Chainalysis’ Global Crypto Adoption Index and avoid missing $25 billion in opportunities. This focus, led by the Pakistan Virtual Asset Regulatory Authority, ensures compliance with FATF guidelines while fostering innovation in a market where informal crypto use is widespread.

Key Takeaways

• Economic Opportunity: Regulation of digital assets like a rupee-backed stablecoin could generate $20-25 billion in growth, capitalizing on Pakistan’s high crypto adoption.
• Financial Inclusion: With over 100 million unbanked adults, stablecoins and CBDCs will lower remittance costs and expand access to services.
• Regulatory Progress: The establishment of PVARA under the Virtual Assets Ordinance 2025 ensures oversight of VASPs, inviting global exchanges to license operations locally.

Conclusion

Pakistan’s pursuit of a rupee-backed stablecoin and robust digital asset regulation signals a strategic pivot toward fintech leadership in emerging markets. By addressing regulatory delays and integrating blockchain solutions, the country can leverage its crypto adoption momentum and youthful population for sustainable growth. As developments unfold with PVARA’s oversight and expert-backed prototypes, stakeholders should monitor these initiatives for opportunities in financial innovation and economic resilience moving forward.

Pakistan’s exploration of a rupee-backed stablecoin emerges amid broader efforts to regulate digital assets and capture significant economic gains. At the Sustainable Development Policy Institute Conference, Zafar Masud, President of the Pakistan Banks Association, underscored the urgency of action. He warned that procrastination could cost the nation $20 to $25 billion in cryptocurrency-related growth, given the vibrant potential in blockchain and fintech.

Masud elaborated on the global stablecoin surge, positioning Pakistan to evaluate a domestically backed version for stability and utility. This aligns with the State Bank of Pakistan’s CBDC advancements, where Faisal Mazhar revealed prototype work assisted by the International Monetary Fund and World Bank. The upcoming pilot will refine the system for efficient financial services, particularly in remittances—a lifeline for millions.

Complementing these state efforts, private sector initiatives like ZAR’s dollar-backed stablecoin proposal target everyday inclusion. Backed by investors including Andreessen Horowitz, VanEck Ventures, Endeavour Catalyst, Coinbase Ventures, and Dragonfly Capital, ZAR raised $12.9 million to serve 240 million residents. This funding highlights international confidence in Pakistan’s digital economy, despite challenges like 100 million unbanked individuals.

Pakistan’s crypto stature is affirmed by its climb to third in Chainalysis’ 2025 Global Crypto Adoption Index, a six-spot gain reflecting grassroots enthusiasm. Estimates suggest $20-30 billion in citizen-held digital assets via peer-to-peer networks, fueling calls for formalization. In September 2025, the nation invited virtual asset service providers and exchanges to license under federal rules, bolstering market maturity.

Central to this is the Pakistan Virtual Asset Regulatory Authority (PVARA), formed via the Virtual Assets Ordinance 2025. As an independent body, PVARA licenses and supervises VASPs, enforcing Financial Action Task Force compliance. A report from Dawn news outlet detailed PVARA’s mandate to uphold global standards, inviting expressions of interest from firms to nurture the ecosystem.

These steps collectively aim to mitigate risks while amplifying benefits. Stablecoins, pegged to the rupee, could streamline payments, cut costs, and integrate informal economies into regulated frameworks. Masud’s insights, drawn from banking expertise, emphasize innovation’s role in leveraging demographics—over 60% under 30—for digital advancement.

Mazhar’s comments on CBDC prototypes further illustrate preparedness. By collaborating with multilateral institutions, Pakistan ensures designs that enhance security and interoperability. The pilot phase will test real-world applications, from e-commerce to cross-border trade, potentially reducing reliance on volatile foreign currencies.

ZAR’s initiative exemplifies market-driven progress. Aiming to bridge banking gaps, it offers stablecoin access via mobile platforms, democratizing finance. The $12.9 million infusion, led by prominent venture firms, signals robust backing for scalable solutions in underserved regions.

Chainalysis’ index ranking underscores adoption drivers: high mobile penetration and remittance flows. Informal channels dominate, but PVARA’s framework promises transparency and investor appeal. By adhering to FATF guidelines, Pakistan mitigates illicit finance risks, building trust essential for sustained growth.

Local experts, citing Dawn reports, view PVARA as pivotal for oversight. Its independence ensures impartial regulation, from licensing to audits. Invitations to global players could inject capital and technology, accelerating adoption.

In essence, Pakistan’s stablecoin and regulatory push reflect a balanced approach: innovation tempered by caution. As Masud noted, the “massive opportunity” in blockchain demands swift, informed policy. For a nation with vast untapped potential, these developments could redefine economic trajectories, fostering inclusion and competitiveness in the global digital arena.