Pakistan's Stablecoin Push Aims to Save Billions in Remittance Costs

Pakistan's Virtual Assets Regulatory Authority (PVARA) is exploring the potential of regulated stablecoins to reduce transaction costs for remittances. Chairman Bilal bin Saqib estimates that using stablecoins could save around $400 million annually, equivalent to a one percentage point reduction in the country's roughly $40 billion annual remittance inflows.

The current global average cost of sending $200 is around 6 percent, leaving room for regulated stablecoins to make cross-border payments cheaper and more efficient. Pakistan currently relies on traditional channels, including the SWIFT system, to receive $40 billion in remittances each year.

PVARA aims to bring virtual assets into the formal financial system and develop use cases for cross-border payments, digital exports, trade finance, and tokenized financial assets. The authority is also examining tokenization as a potential source of financing for small and medium-sized enterprises, exporters, agriculture, energy, and infrastructure.

SMEs account for 90 percent of Pakistan's businesses and 40 percent of GDP, but SME financing stood at only Rs. 850 billion in March. Tokenized trade receivables and private credit could potentially connect Pakistani businesses with international pools of capital.