Pakistan Considers Rupee-Backed Stablecoin Amid Crypto Regulation Delays

Pakistan Eyes Rupee-Backed Stablecoin for Economic Growth

Pakistan is actively considering the introduction of a rupee-backed stablecoin as a strategic move to capitalize on the burgeoning cryptocurrency market. This initiative arises from growing concerns that delays in establishing a clear regulatory framework for digital assets could result in the country forfeiting a substantial $20-$25 billion in potential economic gains.

Zafar Masud, President of the Pakistan Banks Association (PBA), highlighted the significant opportunities during the Sustainable Development Policy Institute (SDPI) Conference. He emphasized the potential for unlocking substantial crypto-related growth and underscored the benefits of a rupee-backed stablecoin and a Central Bank Digital Currency (CBDC) in improving financial accessibility and reducing remittance costs. The PBA president cited the global stablecoin market as a booming opportunity for Pakistan to embrace.

Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, revealed that a CBDC prototype is currently under development with support from the World Bank and the International Monetary Fund (IMF). The plan involves a pilot phase to be executed before the full-scale rollout, allowing for thorough testing and refinement of the CBDC system.

ZAR's Mission: Bridging the Financial Inclusion Gap in Pakistan

Pakistan's stablecoin ambitions follow shortly after ZAR, a fintech startup focused on facilitating access to dollar-backed stablecoins for everyday users in Pakistan and other emerging markets, secured $12.9 million in a funding round led by Andreessen Horowitz (a16z). Other notable investors included Dragonfly Capital, VanEck Ventures, Coinbase Ventures, and Endeavor Catalyst. Targeting Pakistan's vast population of 240 million, where over 100 million adults remain unbanked, ZAR's goal is to bridge the financial inclusion gap through readily accessible stablecoins.

According to Chainalysis' 2025 Global Crypto Adoption Index, Pakistan has solidified its position as one of the world's fastest-growing cryptocurrency markets, climbing six places to claim the third position.

Pakistan Extends Invitation to Global Crypto Firms

In a move to foster innovation and attract foreign investment, Pakistan has extended an invitation to international crypto exchanges and Virtual Asset Service Providers (VASPs) to apply for licenses under a newly established federal regulatory framework. The Pakistan Virtual Asset Regulatory Authority (PVARA) has called upon leading firms to submit Expressions of Interest (EoIs) to actively participate in shaping the country's emerging digital asset landscape. Established under the Virtual Assets Ordinance 2025, the PVARA is responsible for the licensing, regulation, and supervision of VASPs, marking a significant step towards formalizing the cryptocurrency industry in Pakistan.