Pakistan, Japan’s Soramitsu to Test Central Bank Digital Currency This Year

Japanese blockchain technology firm Soramitsu is collaborating with the State Bank of Pakistan (SBP) to launch a pilot program for a central bank digital currency (CBDC) later this year, according to a report by Nikkei Asia. The pilot for the digital Pakistani rupee will operate on Soramitsu’s CBDC platform, funded through Japan’s Ministry of Economy, Trade and Industry under its Global South Future-Oriented Co-Creation Project. SBP Governor Jameel Ahmad said last month that the central bank is “building up our capacity” for a digital currency. Masato Toriya, associate professor at Tokyo University of Foreign Studies, noted that much of rural Pakistan remains cash-dependent, with low rates of bank account ownership. Introducing a CBDC could help reduce the high costs of cash distribution. Soramitsu has previously implemented similar CBDC projects, including Cambodia’s Bakong in partnership with the National Bank of Cambodia, and pilots in Papua New Guinea and the Solomon Islands. In January, SBP and Soramitsu representatives visited Cambodia’s central bank ahead of their collaboration. With a population of 250 million and a GDP of about $400 billion, eight times larger than Cambodia’s, Pakistan represents Soramitsu’s most ambitious CBDC project to date. The initiative also comes as Pakistan strengthens economic ties with China through the China-Pakistan Economic Corridor, part of Beijing’s Belt and Road Initiative. While China has trialed its digital yuan, Pakistan’s CBDC could help maintain financial autonomy and counterbalance Chinese economic influence. Given the country’s patchy internet and electricity infrastructure, Soramitsu is developing offline CBDC capabilities enabling transactions via smartphones without internet access—a feature that could serve as a model for other developing economies with similar challenges.