The Pakistani government has put forward significant amendments to the State Bank of Pakistan (SBP) Act, aiming to reshape key aspects of its financial regulations.

Among the proposed changes, dual nationals may soon be eligible for leadership roles in the SBP, and digital currencies like Bitcoin could gain legal status, marking a departure from Pakistan's traditionally cautious stance on cryptocurrency.

According to a report published by 'The Express Tribune', one of the standout amendments introduces the concept of digital currency to the SBP Act, a move that would grant the central bank the authority to issue and manage both physical and digital currencies.

Previously, the SBP had firmly opposed digital currencies, frequently issuing public warnings about risks associated with cryptocurrencies, such as Bitcoin and Litecoin.

However, the new amendment defines digital currency as an electronic form of money issued by the SBP under a new framework, effectively making it legal tender.

Moreover, the proposal includes changes to section 4C of the Act, allowing the SBP to develop, manage, and oversee digital payment systems through a dedicated subsidiary.

The changes also seek to authorize the SBP to conduct “central bank digital currency” operations, enabling the integration of digital currency within Pakistan’s formal financial system.

Furthermore, the proposed amendments add a provision for penalizing the unauthorized issuance of digital currency, setting fines at twice the value of any unlicensed issuance—a step aimed at bolstering security and control.

This sweeping update to the SBP Act indicates Pakistan's willingness to explore digital currency as a viable element within its financial landscape, while enhancing regulatory measures to mitigate associated risks.