The recent $12.9 million seed funding for Zar, a new stablecoin venture backed by investors like a16z and Coinbase Ventures, highlights the growing demand for digital capital access, particularly remittances, in Pakistan.
This rapid adoption is prompting calls for immediate regulatory clarity. While innovation is vital for jobs and opportunities, experts like Muhammad Faran point to the risk of stablecoins undermining the Rupee's stability and the financial system.
Key Policy Takeaways:
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Regulation over Prohibition: Policy expert Aatiqa Lateef stresses that stablecoins warrant "bespoke oversight"—not a ban—requiring licensing, reserve reporting, and segregation of assets under SBP supervision.
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Mitigating Dollarisation: Settling stablecoin on/off-ramps in Rupees (PKR) through regulated Payment System Providers (PSPs) is crucial to preserving the central bank's visibility and mitigating dollarisation risk.
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The Bank Competition: To prevent stablecoins from disintermediating bank deposits, the policy should allow traditional banks to compete by issuing tokenized deposits and acting as custodians under clear rules.
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The Red Line: Commercial freedom should be promoted to improve financial inclusion but must be restricted where it creates unhedged foreign exchange (FX) exposure or opaque leverage, ensuring all activity is auditable and under SBP control.
The consensus is that commercial innovation must align with measurable public-interest outcomes to protect macroeconomic control.
