Open-mind to cryptocurrency urged

KARACHI:

Finance Minister Muhammad Aurangzeb has stressed the need to enhance the digitisation of Pakistan’s banking system and urged authorities, especially the State Bank of Pakistan (SBP), to consider the potential introduction of cryptocurrency with an “open mind” as digital banking gains momentum in the country.

Speaking at The First Pakistan Banking Summit 2025 in Karachi, Aurangzeb acknowledged that cryptocurrency is already being used in the informal market. He emphasised the importance of staying ahead of the curve by developing a regulatory framework for digital assets and artificial intelligence (AI).

“In Pakistan, we are engaged in the ‘war on cash’ to promote a cashless society through digital banking solutions, point-of-sale (POS) systems, and QR codes,” he explained.

Drawing from discussions at the recent AlUla Conference in Saudi Arabia, he noted that emerging markets are actively exploring AI and digital assets to drive financial inclusion and digital banking. While acknowledging the SBP’s role in regulating cryptocurrency, he urged a broader perspective on its future in Pakistan.

Aurangzeb also reiterated the government’s commitment to digital banking and financial inclusion, emphasising that digitisation is a means to achieve economic efficiency. He highlighted efforts to promote a cashless society through the increased use of POS systems and QR codes.

The government is introducing appropriate reforms, and we will not give in, he categorically stated and vowed to take forward the reform agenda with the same spirit. “Pakistan needs to transform the DNA of its economy and move towards sustainable and inclusive growth,” he argued.

The finance minister termed population growth and climate change as two major challenges for Pakistan, which are adversely affecting resilience and sustainable growth. He informed that Pakistan is building a 10-year country partnership with the World Bank, focusing on key sectors including population growth, climate change, and fiscal discipline.

Aurangzeb highlighted the key role of the banking sector in the growth and documentation of the national economy and stressed that banks should focus on providing financing to SMEs, agriculture, livestock, dairy, and other priority sectors.

Additionally, the finance minister reaffirmed the government’s commitment to structural reforms, particularly in the Federal Board of Revenue (FBR), energy, and taxation, to ensure sustainable economic growth and break the cycle of economic instability.

Finance leaders from emerging markets have reaffirmed their commitment to economic stability and structural reforms, underscoring the importance of regional collaboration and private sector-driven growth, he said. The insights emerged from the recent AlUla Conference in Saudi Arabia, co-hosted by Saudi Finance Minister Mohammed Al-Jadaan and IMF Managing Director Kristalina Georgieva, where finance ministers from the GCC, Africa, Russia, Central Asia, and Latin America gathered for candid discussions on global economic trends.

Speaking about the conference, Aurangzeb highlighted the need for emerging economies to focus on factors within their control rather than external challenges such as geopolitical tensions, demand fragmentation, and financial spill overs.

“The consensus among finance ministers was clear: we need to focus on what is within our hands, ensuring policy continuity and structural reforms that drive long-term growth,” Aurangzeb stated. He noted that despite vulnerabilities in fiscal and external accounts, emerging markets have largely maintained macroeconomic stability over the past 25 years.

One of the dominant themes at the conference was the emphasis on productivity-led growth. Finance ministers widely agreed that governments should prioritise governance, deregulation, and fiscal prudence while allowing the private sector to drive economic expansion.

Aurangzeb highlighted Argentina’s example, where a dedicated Ministry of Deregulation has been established to cut bureaucracy and streamline economic processes. “The focus is shifting towards improving governance, ensuring accountability, and mobilising domestic resources to differentiate between good and bad expenditures,” he added.

Another critical aspect discussed was South-South collaboration, with wealthier emerging economies stepping up to support less developed nations. This included commitments to enhance investment flows, boost trade partnerships, and provide technical assistance for capacity building.

Bringing the discussion back to Pakistan, Aurangzeb noted that the country has made significant strides in macroeconomic stability. He reaffirmed Pakistan’s commitment to ongoing structural reforms, particularly in taxation, energy, and financial digitisation.

Moreover, he stressed the need for Pakistan to strengthen economic ties with the GCC, Africa, and Central Asian republics to drive regional connectivity and trade growth. “With global trade facing new challenges, regional partnerships will be crucial in shaping the economic future of emerging markets,” Aurangzeb remarked.

The finance minister also underscored Pakistan’s dedication to attracting foreign direct investment (FDI) by creating a business-friendly regulatory environment and supporting local investors. “Banks have a key role to play in mobilising domestic investments, which will, in turn, help attract international capital into our economy,” he concluded.

WITH ADDITIONAL INPUT FROM APP