The federal government has proposed multiple amendments to the State Bank of Pakistan (SBP) Act, which includes provisions to legalize digital currencies such as Bitcoin in Pakistan. Additionally, these amendments would enable dual nationals to occupy key positions, such as SBP governors and deputy governors.
The finance ministry has proposed approximately a dozen amendments, which the Ministry of Law has vetted. The ministry has also sent a summary of these proposals to the federal cabinet for approval. The proposed changes aim to allow dual nationals to serve as the governor, deputy governors, and non-executive directors on the central bank’s board, thus reversing a restriction introduced in January 2022.
These restrictions were initially implemented as part of broader amendments that the International Monetary Fund (IMF) influenced, along with the preferences of the former governor. However, the IMF did not specifically advise on dual nationality restrictions. The proposed removal of the clause disqualifying dual nationals from these roles would enable experienced individuals like Dr. Inayat Husain, a dual national nearing the end of his term, to potentially continue his contributions to the SBP.
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Finance Minister Muhammad Aurangzeb has highlighted the narrow pool of candidates for top positions, indicating a potential need to revise nationality-related eligibility conditions. This adjustment is critical as two of the three deputy governor positions will soon be vacant.
Moreover, the amendments seek to officially introduce and define digital currency within the SBP Act, granting the central bank the authority to issue and manage digital currency alongside physical currency. This initiative also includes establishing a subsidiary to develop and manage digital payment systems.
Previously, the SBP issued warnings against virtual currencies, citing concerns over their anonymity and the potential for illegal activities. However, the new amendments aim to integrate digital currencies into the legal framework, enhancing regulatory oversight and financial innovation.
Additionally, the amendments propose expanding the SBP board’s powers in financial oversight and adjusting the protocols for calling board meetings, thus refining governance processes and enhancing operational efficiency.
