Pakistan Considers Rupee-Backed Stablecoin Amid $25B Crypto Opportunity

Pakistan is contemplating the introduction of a rupee-backed stablecoin, as experts caution that delays in the regulation of digital assets could result in a $25 billion loss in economic opportunities for the nation.

Key Takeaways

Potential Growth: Pakistan could unlock $20-$25 billion in cryptocurrency-related growth if regulations are promptly established.
Stablecoin Initiative: The country is seriously considering the development of a rupee-backed stablecoin that could enhance financial access and reduce remittance costs.
CBDC Development: A prototype of a Central Bank Digital Currency (CBDC) is in progress with support from the World Bank and IMF.
Financial Inclusion: A fintech startup, ZAR, is working on making dollar-backed stablecoins accessible to the unbanked population of Pakistan.
Regulatory Framework: Pakistan is inviting international crypto exchanges to apply for licenses under a new federal regulatory framework.

Pakistan considers rupee-backed stablecoin amid $25B crypto opportunity

Economic Opportunity from Crypto

During a conference hosted by the Sustainable Development Policy Institute (SDPI), Zafar Masud, the President of the Pakistan Banks Association (PBA), emphasized that the country could achieve substantial economic growth through cryptocurrencies, estimating up to $25 billion in potential gains. This forecast aligns with the significant expansion of the global stablecoin market. Masud reiterated that Pakistan is "seriously considering a rupee-backed stablecoin" that could improve financial access and decrease remittance costs.

Faisal Mazhar, Deputy Director of Payments at the State Bank of Pakistan, announced that a prototype for a Central Bank Digital Currency is being developed. This project is in collaboration with the World Bank and the International Monetary Fund, with plans for a pilot phase preceding a comprehensive launch.

ZAR's Efforts to Enhance Financial Access

Shortly after these developments, ZAR, a fintech startup focused on providing dollar-backed stablecoins to everyday users in Pakistan and other emerging markets, secured $12.9 million in funding through a round led by Andreessen Horowitz (a16z). Other notable investors include Dragonfly Capital, VanEck Ventures, Coinbase Ventures, and Endeavor Catalyst. Targeting the country’s massive unbanked population—over 100 million adults out of 240 million total—ZAR aims to promote financial inclusion through stablecoin accessibility.

Pakistan’s position in the cryptocurrency realm has been bolstered by its recent advancement in Chainalysis’ 2025 Global Crypto Adoption Index, where it climbed six spots to third place, establishing itself as one of the fastest-growing cryptocurrency markets globally.

Pakistan ranks third in global crypto adoption. Source: Bilal Bin Saqib

Regulatory Progress in Pakistan's Crypto Industry

In a bid to regulate its expanding crypto market, Pakistan opened its doors to international cryptocurrency exchanges and virtual asset service providers (VASPs) in September. The newly established Pakistan Virtual Asset Regulatory Authority (PVARA) has invited leading firms to submit Expressions of Interest (EoIs) to assist in shaping the country's digital asset landscape. PVARA, which operates under the Virtual Assets Ordinance 2025, is responsible for licensing, regulating, and supervising VASPs.

This structured approach to developing and regulating cryptocurrency is pivotal for Pakistan as it seeks to capitalize on the growing digital asset ecosystem while ensuring financial inclusion and economic growth for its citizens.