Digital Economy Boost: Khurram Shehzad's Strategies

Pakistan's Digital Economy Gains Momentum

Advisor to the Federal Finance Minister, Khurram Schehzad, highlighted that the government is actively working on a 'neo economy' and implementing several fundamental steps to promote digitization. These efforts are expected to attract major foreign companies in the near future. His comments were made during a session titled 'Finfyrside: Inside the engine room, in dialogue with leadership' held on the inaugural day of the 26th edition of ITCN Asia Karachi, Pakistan's premier IT and Telecom expo and conference at the Expo Center Karachi.

Schehzad emphasized that Pakistan is rapidly emerging as a significant global player in the neo economy. The finance ministry is striving to lay stable foundations for a supportive infrastructure of the digital economy within the country. This includes the formation of an advisory body known as the Pakistan Crypto Council, which focuses on blockchain policy development, cryptocurrency, and digital governance. Additionally, the Pakistan Virtual Assets Regulatory Authority (PVARA) has been established to oversee and regulate digital assets.

The digital economy is thriving in Pakistan, with the State Bank of Pakistan (SBP) playing a proactive role as the banking regulator. Several other institutions are also contributing to this growth. Over 20 million people are involved in the crypto-business, which has a massive volume ranging between $200 to $300 billion. Schehzad noted that Pakistan's vast trading economy can benefit significantly from embedding digital trends, but it is crucial to upgrade the grassroots economy and bring it under a documented framework.

Foreign companies and miners have shown keen interest in Pakistan's progress in the digital economy. Schehzad expressed expectations of the entry of major foreign companies in the coming days. He pointed out that access to capital and technological infrastructure are key factors for business growth. Supporting micro, small, and medium enterprises (MSMEs) and facilitating their access to finance and technology is essential, as these MSMEs form the backbone of the economy.

In the fiscal year 2024-25, the provision of capital to SMEs by the banking sector has exceeded Rs 700 billion. Schehzad observed that economic stability, falling inflation, and reduced risk have created favorable conditions for providing much-needed capital to MSMEs. Over 1.5 million people in Pakistan are associated with this sector, and the government is determined to upscale and reinforce the MSME sector.

Regarding the launch of the central bank digital currency (CBDC) in Pakistan, the advisor to the finance minister stated that the State Bank of Pakistan is pursuing the matter prudently. "We are not in a hurry but thoroughly studying the international experiences and best practices adopted by different countries across the globe," he explained. While launching a CBDC is not difficult, it is essential to ensure adherence to international standards, a robust legal framework, basic infrastructure, and continuity of policy to gain investor confidence and ensure sustainability.

Schehzad stressed the importance of moving towards emerging technologies to empower people to make their financial decisions with enhanced confidence. In the budget 2025-26, despite various challenges and limited fiscal space, the government aimed to provide relief to the salaried class and reduce the tax burden on the corporate sector.