Pakistan to tap into digital currency potential by 2025

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Bitcoin (virtual currency) coins placed on Dollar banknotes are seen in this illustration picture, November 6, 2017. REUTERS/Dado Ruvic/Illustration
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EMIs are non-bank entities that will be licensed by the State Bank of Pakistan (SBP) to issue e-Money for the purpose of digital payments. (Shutterstock)
Updated 03 April 2019

Pakistan to tap into digital currency potential by 2025

  • Move to address cybersecurity threats faced by institutions, FM Umar says
  • Launch of e-Money regulations a key landmark in FinTech space, analysts add

KARACHI: As the country surges ahead with a financial technology (FinTech) revolution, Pakistan’s central bank said on Monday that it has launched laws for Electronic Money Institutions (EMIs) as a step toward issuing digital currency by 2025.
The regulations – which have been designed with the help of the World Bank — will also seek to cover other requirements such as outsourcing activities, anti-money laundering and counter-terror financing measures, consumer protection, complaint handling mechanism, oversight and regulatory reporting.
EMIs are non-bank entities that will be licensed by the State Bank of Pakistan (SBP) to issue e-Money for the purpose of digital payments.
On Monday, Finance Minister Asad Umar stressed on the need to safeguard financial institutions as “cybersecurity was a growing threat” and termed the launch of the electronic money institutions as a game changer in promoting e-Commerce and a digital economy in the country.
“This new category of institutions will complement the efforts of the government in creating an enabling environment to empower stakeholders in trade and commerce. This will help businesses in improving their productivity and contribute toward positioning the nation for global competition,” he said.
Officials from the SBP concurred. “These landmark regulations are a testament of the SBP’s commitment toward openness, adoption of technology and digitization of our financial system,” Jameel Ahmad, Deputy Governor of SBP, said, adding that the SBP is transforming itself into a modern, digital and technology-oriented bank. 
He said that the SBP is working on issuing digital currency by 2025, with the aim to promote financial inclusion and reduce corruption, and inefficiency. 
“Our currency will remain the same, but as opposed to existing online payment services — where there is the backing of any financial institution — there will be not [be any] financial institution which we are going to bring in,” Abid Qamar, spokesman of the SBP said dispelling the impression that the central bank was going to issue a cryptocurrency. 
Financial experts lauded the initiative as a “landmark in FinTech space”, terming it as the most progressive measure taken by the SBP in years. 
“The launch of e-Money regulations…is a key landmark in our FinTech space. This way, Fintechs have been empowered to open and manage accounts themselves. This day is going to mark the inflection point for digital payments in Pakistan. We need this sort of speed and regulatory environment to set the ground for our FinTechs to flourish,” Khurram Schehzad, a senior financial analyst and CEO of Alpha Beta Core — a financial advisory firm, said. 
Meanwhile, experts said that the initiative will place Pakistan among the few nations in the world who have adopted e-Money mechanisms. “This initiative is capital intensive and would help Pakistan achieve financial inclusion, especially in the rural sector of the country,” S. M. Arif, a financial and banking technologist, told Arab News.
He added that it would also help small and medium enterprises, the farming community, and rural dwellers gain access to financial instruments. “By enabling this regulations authorities have enabled wider base of population whether Urban or Rural, to have access to finance through these new digital mode of payments from verity of players. This will require proper and frequent education of masses from issuers to make good use of such facilities and safety of these instruments” he said, before quickly adding that “the business model must be made keeping in view the local market requirements and security threats as copy pasting a foreign model may backfire”.


India’s Magsaysay award winner says ‘democracy is in danger’

Updated 07 October 2019

India’s Magsaysay award winner says ‘democracy is in danger’

  • Kumar is pained by the decline of independent institutions that have upheld the flags of democracy for more than seven decades

NEW DELHI: Ravish Kumar is nervous about the “danger that Indian democracy is facing today” and how “a systematic attempt is being made by the ruling establishment in Delhi to suppress all the dissenting voices in the country.

“Journalism prepares you to face the unknown everyday, so I was not really surprised when I got the call from the (Magsaysay) award committee,” Kumar said.

“The problem was that I was asked to keep it a secret until they had made a public announcement. It was painful to keep quiet for almost a month,” he told Arab News with a smile.

“When the news became public, I realized what I had been bestowed with. I feel the award is a vindication of trust in good journalism. People felt as if the award had been bestowed on them,” he added.

It is this concern for democracy and its institutions that earned Kumar the prestigious Magsaysay award for 2019.

Instituted in 1957, it is awarded every year by the Philippine government in memory of its former president Ramon Magsaysay for “integrity in governance, courageous service to the people and pragmatic idealism within a democratic society.”

Kumar, who works as a managing editor of India’s leading bilingual TV channel, NDTV, has created a niche for himself in the world of journalism with his daily primetime show, which draws huge audiences from across India. 

At a time when most mainstream TV channels and newspapers have stopped questioning the government and challenging its narrative, Kumar’s reporting takes a critical approach to the lawmakers.

For this constant critique of the ruling Bhartiya Janata Party (BJP), the government does not send any of its spokespersons on his show or the channel.

He laments that a large section of the Indian media has become “an extended arm of the government and the mouthpiece of the establishment.”

For his outspoken attitude, Kumar and his family have received threats from “people who are subsidized by the ruling party.”

“I don’t have any hope for the media. It is dead in the country. Just a few are holding the placard of fearless journalism,” he said, adding that “the death of independent media has affected true reporting from Jammu and Kashmir.

“The situation in the region is so bad that after the abrogation of its special status, even the significant moderate voices in India have been pushed to the militant camps,” he said.

Describing the government’s policy on Kashmir as “brazen,” he questioned the “audacity of the government to hold local body elections in the valley when there is a complete lockdown.

Kumar is pained by the decline of independent institutions that have upheld the flags of democracy for more than seven decades, adding that he was aghast at the Supreme Court’s silence on the abrogation.

“Why is it taking so long for the apex court to intervene on the issue of the internet lockdown in the Kashmir valley? Can you imagine the American Supreme Court behaving the way the Indian judiciary is acting on such a crucial issue?” He asked.

He said that the decline of independent institutions such as the media, judiciary and election commission is gradually creating a democratic imbalance.

Kumar understands the award has given an extra responsibility on him and that he felt “burdened with expectations.” So great are those expectations, he has not ruled out entering politics.

“Politics is a good thing. I tell everyone to join politics,” he said, adding that his current responsibility is to “warn people about the danger that is lurking in Indian society.”