Pakistan signed an agreement on Jan. 9 with a company affiliated with World Liberty Financial (WLFI) to integrate the USD1 stablecoin into its regulated digital payments system. The deal was executed through SC Financial Technologies, an affiliate of WLFI.
WLFI CEO Zach Witkoff traveled to Islamabad for the announcement. He met with senior officials including Prime Minister Shehbaz Sharif, Field Marshal Asim Munir, Finance Minister Muhammad Aurangzeb, the chairman of the Securities and Exchange Commission, and the Governor of the State Bank.
"Our focus is to stay ahead of the curve by engaging with credible global players, understanding new financial models, and ensuring that innovation, where explored, is aligned with regulation, stability, and national interest," Finance Minister Aurangzeb said.
The partnership targets faster and cheaper cross-border payments, with a specific focus on remittances. Overseas Pakistanis send home more than $30 billion annually, much of it through traditional banking channels. Officials hope using a regulated stablecoin could reduce fees and speed up settlement times.
This agreement marks one of WLFI's first partnerships with a sovereign state. The USD1 stablecoin is expected to operate under regulatory oversight within Pakistan's digital finance infrastructure.
Pakistan's relationship with cryptocurrency has changed in recent years. The country was once firmly opposed to digital assets but has spent the past two years rewriting its stance as global attitudes shifted, particularly in the United States.
The timing of the agreement reflects warming U.S.-Pakistan relations. Regional observers, particularly in India, have raised questions about data security and geopolitical implications, especially following a recent terrorist attack in Pahalgam that heightened tensions.
Pakistan is also moving on broader reforms, including drafting comprehensive virtual asset regulations and preparing pilots for its own central bank digital currency.