Editorial
The federal government wants to change the rules for the State Bank of Pakistan (SBP) to allow dual nationals to hold top positions like governor and deputy governors at the bank. They also aim to make digital currencies, like Bitcoin, legal in Pakistan. If these changes get approved by the federal cabinet and Parliament, it would mark a major shift from the SBP’s previous cautious attitude toward cryptocurrencies.
Sources say that the finance ministry has suggested about a dozen changes to the SBP Act, which the Ministry of Law has checked. A proposal has been sent to the federal cabinet, showing a change in how the government wants to handle financial matters.
One main change would drop the rule that prevents dual nationals from serving as governor, deputy governors, and board members of the SBP. This rule was first set in January 2022 under pressure from the International Monetary Fund (IMF) and previous leadership. However, the IMF did not specifically ask for this dual nationality restriction.
Currently, a deputy governor, Dr. Inayat Husain, who is a dual national, is about to finish his term on November 8. Because he has valuable experience, the government is interested in keeping him for another five years. There was no ban on dual nationals when he was first appointed.
Finance Minister Muhammad Aurangzeb noted last month that there are not many qualified candidates for top roles and suggested that the rule about nationality should be reconsidered. By November 8, two deputy governor positions may be vacant, which could create urgency for the government to make changes.
The proposed updates to the SBP Act will introduce digital currency for the first time. Until now, the SBP had warned against the use of digital currencies and said they were not recognized as legal tender. The new rules would define digital currency as an official currency that the SBP can issue.
These changes would also allow the SBP to manage both physical and digital money. The SBP plans to create a subsidiary to run digital payment systems and could face penalties for those who issue digital currency without permission.
Finally, the amendments would give the SBP board more powers to approve reports and modify meeting procedures to improve governance.
