Pakistan Teams Up with Japan’s Soramitsu for Digital Currency Launch After Virtual Assets Act 2025

Pakistan Chooses Japanese Partner for Central Bank Digital Currency Project

KARACHI: In a major step toward financial digitalisation, the State Bank of Pakistan (SBP) has partnered with Japan’s blockchain leader, Soramitsu, to develop and launch a Central Bank Digital Currency (CBDC). This development comes shortly after the federal government officially approved the Virtual Assets Act 2025, setting a legal foundation for virtual currency operations in the country.

According to a report published by Nikkei Asia on Tuesday, Soramitsu will work closely with the SBP on a pilot programme designed to introduce CBDC in Pakistan. The collaboration aims to modernise the financial system by integrating secure and regulated blockchain-based payment solutions.

Government Approval Sets the Stage

The landmark Virtual Assets Act 2025, approved on 9 July, established the Pakistan Virtual Asset Regulatory Authority (PVARA) — an autonomous federal body tasked with overseeing and regulating all virtual asset-related activities. The authority will license and supervise businesses in the sector, ensuring they meet strict compliance, incorporation, and reporting standards.

Under this law, any entity offering virtual asset services must obtain official approval and follow transparent operational guidelines. The Act also introduces a regulatory sandbox — a controlled environment allowing innovative technologies and business models to be tested under regulatory oversight before full-scale deployment.

In certain cases, PVARA has the power to issue “no-action letters,” offering conditional exemptions from legal action while still holding companies accountable for responsible conduct.

Shariah Compliance at the Core

To align with Pakistan’s Islamic finance framework, a dedicated Shariah Advisory Committee will be established. This committee will evaluate whether virtual asset products comply with Islamic principles and will provide binding rulings for licensed companies operating within this domain.

Any financial service provider offering Islamic-based digital products must adhere strictly to these rulings, ensuring faith-based financial integrity in the virtual currency sector.

New Legal Support Structure

The Virtual Assets Act 2025 also paves the way for a Virtual Assets Appellate Tribunal, which will handle appeals against PVARA’s decisions. This tribunal will operate independently, consisting of experts in law, finance, and technology to ensure fair and specialised dispute resolution.

From 2021 Roadmap to 2025 Reality

Pakistan’s journey toward digital currency began in 2021 when the SBP first included CBDC in its digital banking roadmap. However, progress accelerated recently, with increased collaboration between government bodies, central bank officials, and industry stakeholders.

Just last month, a high-level meeting in Islamabad brought together bankers, currency dealers, and fintech experts to discuss how digital currencies could reshape Pakistan’s financial landscape. While enthusiasm for the CBDC is growing, experts remain divided on its global adoption potential, as many central banks worldwide are still cautious about full-scale implementation.

Global Context and Regional Trends

Pakistan’s latest move reflects global trends, mirroring efforts in countries like China, India, Nigeria, and several Gulf states that have initiated tightly regulated CBDC pilot programmes. These projects aim to explore the efficiency, security, and accessibility benefits of blockchain-based payment systems while maintaining strict central bank oversight.

In the wider global financial ecosystem, blockchain-based currencies are gaining momentum as nations seek faster, more secure, and transparent payment mechanisms. However, concerns remain about cyber threats, monetary control, and interoperability between national systems.

Soramitsu’s Role in Pakistan’s CBDC

Soramitsu, a Japanese blockchain technology developer with a track record of creating secure and scalable financial platforms, has been chosen for its expertise in delivering blockchain-based payment solutions. The company is known for developing the CBDC system in Cambodia, among other high-profile projects.

With its advanced blockchain infrastructure, Soramitsu is expected to provide Pakistan with a reliable platform that can handle large-scale transactions while meeting the SBP’s security and compliance requirements.

Potential Benefits for Pakistan’s Economy

Faster Transactions: CBDC could significantly reduce transaction times for both domestic and cross-border payments.
Lower Costs: By eliminating intermediaries, digital currency can cut transaction fees for consumers and businesses.
Financial Inclusion: CBDC can provide secure payment access to unbanked populations in remote areas.
Transparency: Blockchain-based systems allow for full transaction traceability, reducing risks of fraud and corruption.

Industry analysts believe that if implemented successfully, Pakistan’s CBDC could enhance efficiency in government payments, improve tax collection, and promote financial literacy across the country.

Balancing Innovation and Risk

While the promise of CBDC is strong, experts stress that successful adoption will depend on robust security frameworks, public awareness campaigns, and careful risk management. The SBP will need to ensure the system is protected against cyberattacks and misuse while encouraging innovation in the fintech sector.

As the pilot programme unfolds, Pakistan will join a select group of nations experimenting with central bank digital currencies — positioning itself as a regional leader in blockchain-based financial innovation.

Looking Ahead

The partnership between the SBP and Soramitsu marks a pivotal step in Pakistan’s digital finance evolution. With legislative backing from the Virtual Assets Act 2025 and a strategic international collaboration, the country is set to test the waters of a regulated, Shariah-compliant CBDC that could redefine how Pakistanis interact with money in the coming years.

If the pilot proves successful, a nationwide rollout could follow, bringing Pakistan closer to its vision of a modern, inclusive, and fully digitised economy.