The Asian Development Bank (ADB) is continuing its initiative to improve digitalization metrics across the continent, with the latest being a tailored financial reform program for Pakistan.
Recently, the ADB unveiled an $800 million program for Pakistan designed to improve public financial management across key sectors of the economy. Dubbed the Improved Resource Mobilization and Utilization Reform Program, the multilateral development bank’s initiative will support Pakistan’s previous digitalization objectives.
ADB will offer a $300 million policy-based loan to Pakistan and another $500 million policy-based guarantee. A close look at the announcement reveals that the guarantee can raise as much as $1 billion from local commercial banks.
The sum will be deployed to support a raft of incoming financial reform regulations for the country. Going forward, all levels of government spending will employ digital tools to promote public expenditure tracking and improved service delivery.
Apart from transparency perks, integrating digital tools into public spending will lower costs and improve efficiency in government processes.
The combined impact of the incoming wholesale changes is expected to support Pakistan’s financial resilience in the face of macroeconomic uncertainties. Pakistan has previously signaled plans to overhaul its financial systems, leaning on emerging technologies to revolutionize key sectors of its economy.
“Pakistan has made significant progress in improving macroeconomic conditions,” said ADB Country Director Emma Fan.
Conversely, the ADB is extending its streak of supporting Asia’s digital transformation through a slew of initiatives utilizing artificial intelligence (AI). In 2024, the ADB backed a raft of emerging technology projects in the Philippines, deepening its footprint in the Asia-Pacific.
Apart from its financial utility, Pakistani authorities are embracing DLT to revolutionize public services in the country. Following the expansion of its digital wallet coverage, the country has launched an initiative to digitize its birth and death records.
Furthermore, the country is monitoring blockchain-based remittances to avoid the bottlenecks associated with traditional cross-border payment systems. Not keen on wasting surplus electricity, authorities are also turning to Bitcoin mining, much to the dismay of the International Monetary Fund (IMF).
Kazakhstan steps up digitalization drive
The National Bank of Kazakhstan (NBK) has unveiled a digital asset card payment solution for merchants and consumers nationwide, merging traditional finance (TradFi) with Web3.
According to a report, the new initiative will allow users to make payments for goods and services using credit and debit cards. The central bank will not issue new cards but will support the integration of licensed digital asset wallets with traditional cards.
Under the initiative, consumers will use their traditional bank cards linked to a digital asset wallet to make point-of-sale (PoS) payments. Merchants will receive fiat currency, while consumers will make payments with digital assets, leveraging existing payment infrastructure.
“The initiative provides the ability to securely and conveniently integrate the turnover of digital assets into the existing payment infrastructure,” said the NBK.
A closer look at the initiative reveals that digital assets used for PoS payment are instantly sold at the Astana International Financial Center (AIFC) digital asset market. The fiat equivalent will be instantly credited to users, allowing the merchant to receive tenge for payment of goods and services.
The NBK said the launch will adopt a phased approach, undergoing a pilot project before rolling it out nationwide. The city of Almaty will serve as the test bed for the digital asset cards, with authorities unveiling several digitalization initiatives.
Authorities are eyeing scalable fiat-digital asset gateways across Kazakhstan and new decentralized autonomous organization (DAO) use cases for public utilities. There are also plans to roll out a tenge-backed stablecoin that may be embedded into the digital asset card initiative.
“These initiatives reflect our ambition to create a safe, inclusive, and forward-looking digital finance ecosystem aligned with the best international practices and tailored to Kazakhstan’s needs,” said Binur Zhalenov, an executive at the NBK.
Kazakhstan’s engagement with digital assets has accelerated rapidly, with the largest landlocked country expressing a desire to be a regional digital currency hub. Previously, a Kazakh lawmaker mooted the idea of a national digital asset bank to streamline the fledgling ecosystem in line with global best practices.
Digital payments in Kazakhstan are rising, buoyed by the combination of friendly government initiatives and a changing consumer behavior. Despite the push for digital assets, the country is still pursuing a central bank digital currency (CBDC) to broaden payment options for consumers.
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