The Pakistani government's proposal to amend the SBP Act, or herald its attempt to legalize cryptocurrencies, marks a shift in the country's financial policy. The amendment would allow the Central Bank of Pakistan (SBP) to issue digital currencies and manage the country's currency in both physical and digital forms, in addition to granting the SBP the authority to conduct CBDC business, stating that CBDCs can operate as legal tender. In addition, SBP plans to establish a subsidiary to develop and operate a digital payment system. The proposed amendment also proposes penalties for the unauthorized issuance of digital currencies, with fines equal to twice the value of the illegally issued currency. While the federal cabinet has yet to announce a specific timeline for approving the amendments, the changes are likely to shift the focus to regulatory oversight and the inclusion of digital currencies in Pakistan's financial framework. The amendments would also expand the powers of the SBP board to enable it to approve broader financial reporting and strengthen governance processes. It is understood that the SBP has historically classified cryptocurrencies such as bitcoin as illegal currencies and issued warnings about the associated risks, with particular emphasis on the lack of legal protection for financial losses caused by the high volatility of cryptocurrencies. (The Express Tribune)