Team Details:
| ABDUL RASHID Professor of Economics/Director General, International Institute of Islamic Economics (IIIE), International Islamic University, Islamabad (PI) |
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| ZAINAB JEHAN Associate Professor/Chairperson, Department of Economics, Fatima Jinnah Women University, Rawalpindi (Co PI) |
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| SAIRA TUFAIL Assistant Professor, Department of Economics, Fatima Jinnah Women University, Rawalpindi (Co PI) |
Theme/Relevant Ministry:
BUSINESS, INVESTMENT AND GROWTH:
Ministry of Finance, State Bank of Pakistan
Project Brief:
The study investigates the adequacy of existing, technological, regulatory and financial architecture, appropriateness, awareness and preparedness of financial ecosystem and preparedness and acceptability of business and general public to the Central Bank Digital Currency to be launched by State Bank of Pakistan. Through various qualitative and quantitative research methods, namely scoping review, in-depth interviews, focus group discussions, and structured questionnaire, this analysis helps in identification of the best practices of CBDC in the existing structure as well as in understanding the challenges posed by the CBDC. Moreover, the study, at one hand, intends to gauge the knowledge and perceptions of all stakeholders about the CBDC. On the other hand, it examines the preparedness and readiness of the financial institutions, financial intermediaries, general public for the digital currency of the central bank. The findings of the study will be useful for the policy makers to formulate the guidelines for the issuance and application of the CBDC.
Public Policy Relevance:
The study’s data and findings are expected to be directly relevant to the monetary policymaking process. The research on Pakistan CBDC is still in its early phases, with the news released for the first time in 2019. The study can be seen as a significant step forward in the research of CBDC development. A study on CBDC in Pakistan entails pivotal relevance for a number of monetary and financial policy dimensions including, financial architecture, and evolution of financial ecosystem, financial inclusion, monetary transmission mechanism and economic development. The evaluation of success (failure) stories of other countries, other related activities undertaken in research may aid policymaker insights regarding the appropriate design of Pakistan CBDC and also highlight the gaps in existing regulatory structure, financial ecosystem and financial architecture. Moreover, it may also deliberate on the possibilities of integration of CBDC in existing financial ecosystem. Insights from the study can help central banks in formulating and adapting monetary policies in the context of a dual-currency environment with the presence of CBDC. Moreover, the results from the various activities conducted in the research will expose the level of understanding and preparedness of financial institution, business, general public regarding the functioning of central bank and its technological innovations. In this regard, this research can be useful to convey to central bank about the effectiveness of its current communication strategies can aid central bank in establishing engagement strategies and resolve the reservations and adopt risk mitigation strategies.