The State Bank of Pakistan (SBP) has chosen Japanese blockchain developer Soramitsu to design and implement a central bank digital currency (CBDC), following last month’s federal approval of the Virtual Assets Act 2025 the Dawn reports.

According to Japanese media reports cited by the Dawn, Soramitsu will work with the SBP on a pilot programme to introduce the CBDC, part of a broader strategy to regulate and integrate digital assets into Pakistan’s financial system. The legislation, approved on July 9, establishes the Pakistan Virtual Asset Regulatory Authority (PVARA), an independent federal body tasked with licensing and overseeing entities dealing in virtual assets.

The law mandates service providers to obtain licences, meet incorporation and compliance standards, and follow strict reporting rules. It also introduces a regulatory sandbox for controlled innovation and allows PVARA to grant limited exemptions under defined conditions. A shariah advisory committee will now ensure that Islamic finance principles are upheld, while an appellate tribunal will hear challenges to PVARA decisions.

Pakistan began exploring CBDCs in 2021 as part of its banking digitisation roadmap. Recent months have seen increased government engagement with bankers, currency dealers and technology experts to assess the potential of virtual currencies. While interest is growing, experts remain divided on their long-term viability.