The federal government of Pakistan has formally approved the formation of a new state-owned enterprise: the Strategic Digital Wallet Company. The move comes as Pakistan rolls out legislation and regulatory frameworks aimed at better managing virtual assets, integrating digital finance, and safeguarding government-owned digital assets
What Is Being Set Up
- The Strategic Digital Wallet Company will be incorporated as a non-profit entity under Section 42 of the Companies Act, 2017, and registered with the Securities and Exchange Commission of Pakistan (SECP).
- The new company is being established in line with the Virtual Asset Ordinance, 2025, which sets out a legal framework for virtual assets and Virtual Asset Service Providers (VASPs) in Pakistan.
- Founding members of the Board of Directors include Taimoor Hasan (Joint Secretary Finance Division); Humera Azam Khan (Joint Secretary, Cabinet Division); and Amir Muhammad Khan Niazi (Joint Secretary, Law & Justice Division).
- Ahmed Taimoor Hasan has been appointed CEO on an additional charge basis, until a permanent CEO is chosen compliant with the rules under the State-Owned Enterprises (Governance and Operations) Act, 2023.
Why This Is Being Done: The Rationale
The creation of the Strategic Digital Wallet Company is part of Pakistan’s broader effort to modernize its financial infrastructure, bring digital asset regulation into the official fold, and maintain control and security over government digital assets. Key motivations:
- Regulatory Clarity & Legal Framework
With the Virtual Asset Ordinance, 2025 now in place, Pakistan is establishing regulatory oversight for digital/virtual assets and VASPs. A government-wallet company helps ensure public-sector digital assets are managed under legal and regulatory supervision. - Security & Sovereignty over State Digital Assets
The government intends to hold state-owned digital assets in a secure, centrally managed wallet to reduce risks such as mismanagement, fraud, or cyber vulnerabilities. - Enabling New Use Cases
The company is expected to provide infrastructure for future developments like tokenized government bonds, possibly a sovereign digital currency, cross-border blockchain transactions, and more transparent handling of digital assets. - Alignment with International Standards & Oversight Bodies
In establishing oversight via Virtual Asset regulation, SECP registration, State-Owned Enterprise governance under the 2023 Act, Pakistan is trying to align with global expectations around anti-money laundering, financial transparency, and crypto regulation.
Potential Impacts & Challenges
This is a major strategic step, but its execution and consequences will depend on many factors. Here’s what to watch out for:
Impacts
- Transparency and Trust: Centralizing government digital asset management under a state-owned company could raise public & investor trust if handled well.
- Innovation Enablement: This might encourage fintech, blockchain, and crypto-related investments in Pakistan, given clearer rules and institutional support.
- Financial Inclusion and Infrastructure: As Pakistan expands digital payments and wallets (see BISP wallet schemes, etc.), having a government wallet company may integrate better with public disbursement, welfare programs, and identity systems.
Challenges & Risks
- Governance Risks: State-owned entities often struggle with bureaucratic delay, political interference, capacity constraints, or corruption. Ensuring strong, transparent governance will be crucial.
- Security and Cyber Risk: Holding state-held virtual/digital assets is high stakes. The Digital Wallet must be resilient against hacking, fraud, or mis-use.
- Regulatory Compliance & International Reputation: Pakistan has been under pressure (e.g. from FATF) to comply with AML/CFT and broader financial integrity standards. Missteps could attract sanctions or limit foreign investment.
- Energy & Infrastructure Costs: Some related initiatives (e.g. Bitcoin mining, state-supported reserves) require energy, proper broadband / tech infrastructure etc. Pakistan has pre-existing energy constraints; allocating resources wisely will be important.
How It Fits Into What’s Already Happening
This company is part of a cluster of related developments:
- The Pakistan Digital Assets Authority (PDAA) has been announced to regulate digital asset infrastructure, exchanges, wallets, and virtual asset service providers.
- Pakistan has already unveiled a government-led Strategic Bitcoin Reserve together with a national Bitcoin wallet to hold digital assets under state custody, which are not for speculation but as a sovereign reserve.
- Expansion of digital wallet usage in welfare programs: e.g. 10 million digital wallets for BISP beneficiaries.
What to Expect Next
- Appointment of Permanent Leadership & Board: Now that the company is incorporated and the founding board is in place, selection of a permanent CEO and possibly more board members will follow.
- Technical & Security Infrastructure: Building secure wallet infrastructure, custody arrangements, cybersecurity protocols and integrating with existing systems (finance, treasury, IT, identity databases).
- Regulatory Interplay: The new entity will need to coordinate with SECP, State Bank of Pakistan, the Pakistan Crypto Council, PDAA, and perhaps ministries like Finance, IT, Law & Justice. Laws like the Virtual Asset Ordinance and State-Owned Enterprises Act will guide governance.
- Pilot Projects & Use Cases: Early applications may include managing tokenized government bonds, digital identity integration, payment of government obligations or welfare disbursements via the wallet, possibly cross-border payments.
- Public Communication & Trust Building: Given the novelty and public skepticism around crypto/digital assets in many places, communicating clearly about what the wallet does, what it does not, how assets are protected etc will be essential.
The Strategic Digital Wallet Company represents a landmark move by the Pakistani government toward institutionalizing virtual assets management and embracing digital-finance infrastructure. If properly governed and securely implemented, it could boost financial inclusion, enable innovation, and create a more transparent framework for state-held digital assets. But there are steep challenges: security risks, regulatory enforcement, resource constraints and the need to build public trust.
In many ways, Pakistan is trying to thread a needle: leveraging the promise of digital/crypto finance, while controlling the risks through legal, institutional, and operational safeguards. How well this enterprise is executed may serve as a benchmark for other countries in the region navigating the emerging digital-asset economy.
