Pakistan is set to take a major step toward digitalizing its financial ecosystem, as the State Bank of Pakistan (SBP) collaborates with Japanese blockchain technology firm Soramitsu to pilot a central bank digital currency (CBDC) later this year. The development was reported by Nikkei Asia and marks the most ambitious CBDC project undertaken by Soramitsu to date.
The digital Pakistani rupee pilot will operate on Soramitsu’s proprietary CBDC platform and is funded through Japan’s Ministry of Economy, Trade and Industry under its Global South Future-Oriented Co-Creation Project. The program aims to modernize the country’s payment infrastructure, improve financial inclusion, and reduce reliance on physical cash, particularly in underserved rural areas.
SBP Governor Jameel Ahmad recently confirmed that the central bank is building its institutional capacity for launching a digital currency. With much of rural Pakistan still reliant on cash and facing low bank account penetration, the initiative has the potential to address the high costs of cash handling and distribution, while bringing more citizens into the formal financial system.
Masato Toriya, associate professor at Tokyo University of Foreign Studies, emphasized that rural cash dependency is a barrier to financial accessibility in Pakistan. A well-designed CBDC, he said, could lower transaction costs, improve security, and open the door to digital financial services for millions who remain outside the banking network.
Soramitsu brings considerable experience to the project, having developed Cambodia’s Bakong CBDC system in collaboration with the National Bank of Cambodia. It has also conducted CBDC pilots in Papua New Guinea and the Solomon Islands. In preparation for Pakistan’s launch, officials from SBP and Soramitsu visited Cambodia’s central bank earlier this year to study the country’s successful implementation.
Pakistan, with a population of around 250 million and a GDP of approximately $400 billion—more than eight times that of Cambodia—presents a far larger and more complex operational challenge for Soramitsu. The rollout will need to address infrastructural gaps, including limited internet penetration and power supply issues in certain areas.
To overcome these challenges, Soramitsu is developing offline transaction capabilities for the CBDC, allowing smartphone-based payments without internet connectivity. This feature is expected to be a game-changer for remote and underserved communities, and could serve as a blueprint for other developing economies facing similar technological constraints.
The timing of the CBDC initiative also coincides with Pakistan’s deepening economic relationship with China through the China-Pakistan Economic Corridor (CPEC), a flagship component of Beijing’s Belt and Road Initiative. While China has already piloted its own digital yuan, Pakistan’s move to develop a CBDC in partnership with Japan could help ensure financial autonomy and provide a counterbalance to foreign economic influences.
If successful, the CBDC pilot could transform Pakistan’s payments landscape, reduce inefficiencies in cash handling, and open new opportunities for fintech innovation. It would also position the country among a growing list of nations exploring or adopting central bank-backed digital currencies as part of their long-term financial modernization strategies.
