ISLAMABAD: The federal government has proposed introducing a series of amendments to the State Bank of Pakistan (SBP) Act, aiming to permit dual nationals to hold key positions within the central bank and legalize the use of digital currencies, including cryptocurrencies like Bitcoin.
According to government sources, the finance ministry has proposed approximately a dozen amendments, which have been reviewed by the Ministry of Law.
A summary of these changes has been submitted to the federal cabinet for approval, indicating a significant shift in the government’s financial policy approach.
The amendments define digital currency as a form of currency issued by the SBP, allowing the central bank to manage Pakistan’s currency in both physical and digital formats.
The SBP is also set to establish a subsidiary dedicated to developing and operating digital payment systems.
The amendments would lift the ban on dual nationals serving as governors, deputy governors, and non-executive directors on the SBP’s board. This restriction was initially implemented in January 2022, following amendments influenced by the International Monetary Fund (IMF) and the preferences of the former SBP governor. Notably, the IMF did not specifically recommend this dual nationality restriction.
Among the proposed changes is an amendment to Section 13 of the SBP Act, which currently disqualifies individuals with dual nationality from serving in senior roles. The new amendment aims to remove this disqualification, paving the way for experienced individuals, such as current deputy governor Dr. Inayat Husain, who is a dual national, to be reappointed.
Finance Minister Muhammad Aurangzeb recently emphasized the need for flexibility in the eligibility criteria for top positions within the SBP, citing a limited talent pool. With two of the three deputy governor positions potentially becoming vacant soon, the government faces pressure to act swiftly on these amendments.
In a groundbreaking move, the proposed amendments also introduced legal provisions for digital currency for the first time in the SBP Act. This shift reflects a departure from the SBP’s historically cautious stance towards digital currencies, which it had previously warned against in public advisories.
Furthermore, the amendments include penalties for unauthorized issuance of digital currencies, aiming to regulate this emerging sector more effectively.
Additional proposals seek to enhance the SBP board’s governance, granting it expanded powers in approving financial reports and clarifying the processes for convening board meetings.
If approved, these changes could significantly reshape the landscape of financial governance and digital currency usage in Pakistan, potentially opening new avenues for economic growth and innovation.
