State Bank Proposes Legalization of Digital Currency

Islamabad: The government of Pakistan has proposed amendments to the State Bank of Pakistan Act, which include granting legal status to digital currency and allowing dual citizens to hold the positions of Governor and Deputy Governor at the central bank.
According to sources, the Ministry of Finance has suggested nearly a dozen amendments to the State Bank of Pakistan Act. The Ministry of Law has reviewed these proposals, and a summary has been sent to the federal cabinet for approval. If passed, this will represent a significant shift in government policy.
The proposed amendments would remove the ban on dual citizens holding key positions within the State Bank, including that of the Governor, Deputy Governors, and non-executive directors. This change involves amending Section 13 of the Act, which currently prohibits individuals with dual citizenship from occupying these roles.
Sources indicate that the term of the current Deputy Governor, Dr. Inayat Hussain, who holds dual citizenship, is set to expire on November 8. At the time of his appointment, there were no restrictions on dual citizenship, and the government wishes to extend his term for five years due to his qualifications and experience. Another Deputy Governor, Dr. Saeed Ahmed, who has served as an advisor to the IMF, also holds dual citizenship.
Additionally, for the first time, the proposed amendment bill introduces the concept of digital currency. Previously, the State Bank had rejected calls for digital currency and issued warnings against its use. The new definition of digital currency will be included in the amendments, stating that currency issued by the bank in digital form will be considered legal tender under Section 25.
Under these sections, the currency notes issued by the State Bank are also classified as legal tender. The amendment bill also proposes the establishment of a new subsidiary to manage digital payment systems. Furthermore, it aims to grant the Board additional powers to approve financial reports.