Pakistan is positioning itself as an early mover in sovereign-level stablecoin experimentation, signaling a shift in how emerging economies may approach cross-border payments in the coming years.
Rather than relying solely on traditional banking rails or waiting for a fully launched central bank digital currency, authorities are testing an interim solution anchored to a US dollar stablecoin.
Key Takeaways
Pakistan is testing a USD-pegged stablecoin for cross-border payments.
The project runs alongside, not instead of, a future digital rupee.
The deal marks one of World Liberty’s first sovereign-level pilots.
Rapid crypto adoption is raising regulatory and fiscal risk concerns.
A parallel payments rail takes shape
People familiar with the matter say Pakistan has entered into an agreement with an entity connected to World Liberty Financial to assess the use of its USD1 stablecoin for international payments. The project involves coordination with the State Bank of Pakistan and is designed to sit inside a regulated framework, rather than operate as an informal crypto workaround.
The structure is deliberately additive. USD1 would complement Pakistan’s existing plans for a central bank digital currency instead of replacing them, offering a faster settlement option for cross-border flows while longer-term domestic systems are still being developed.
An official announcement is expected during an upcoming visit to Islamabad by World Liberty’s chief executive, Zach Witkoff, though authorities have so far remained publicly silent.
Why World Liberty is gaining traction
For World Liberty Financial, the Pakistan initiative would be among its earliest known engagements with a national government. Launched in 2024, the firm has attracted attention due to its links to business interests associated with Donald Trump, at a time when US policy has become more permissive toward regulated stablecoins.
That regulatory shift has already enabled USD1 to be used in large transactions. In one notable case, Abu Dhabi-backed investor MGX used the token to acquire a multibillion-dollar stake in Binance, demonstrating that the stablecoin is being positioned for institutional-scale use rather than retail experimentation.
Pakistan’s wider digital finance acceleration
The stablecoin talks are part of a much broader policy push. Pakistan sees digital assets as a practical tool to modernize its financial system, reduce cash dependency, and improve remittance efficiency – a critical issue for an economy heavily reliant on overseas inflows.
Over the past year, the central bank has confirmed work on a digital currency pilot and advanced draft legislation to regulate crypto markets. Regulators have also given preliminary clearance to major exchanges such as Binance and HTX, allowing them to begin local onboarding ahead of full licenses.
Separately, the finance ministry has explored tokenizing state assets, including government bonds and commodity reserves, as part of a broader effort to bring public finance onto digital rails.
Momentum brings scrutiny
The speed of adoption has triggered debate inside policy circles. Estimates suggest millions of Pakistanis already hold digital assets worth several billion dollars, even as regulatory capacity is still catching up.
Critics warn that rapid integration of crypto-based systems could expose Pakistan to volatility and governance challenges, particularly if tokenized instruments sit outside established fiscal oversight frameworks. There is also concern that international credit rating agencies may take a closer look at how these new structures affect sovereign risk.
A bellwether for emerging markets
Pakistan’s engagement with USD1 highlights a growing reality: stablecoins are no longer confined to private fintech use cases. They are increasingly being tested as semi-official infrastructure for international payments, especially in countries seeking faster, cheaper alternatives to correspondent banking.
Whether this initiative evolves into a permanent settlement rail or remains a controlled pilot will depend on regulation, execution, and political backing. Either way, Pakistan is emerging as a live test case for how stablecoins could be woven into national payment systems – long before most developed economies are ready to make the same leap.
