KARACHI: State Bank of Pakistan is preparing to launch a pilot for a digital currency and is finalising legislation to regulate virtual assets, central bank Governor Jameel Ahmad said on Wednesday, as the country ramped up efforts to modernise its financial system.

Central banks globally are exploring the use of digital currencies as interest in blockchainbased payments grows.

Pakistan`s move follows similar steps by regulators in China, India, Nigeria and several Gulf states to test or issue digital currencies through controlled pilot programmes.

At the Reuters NEXT Asia summit in Singapore, Ahmad said Pakistan was building up our capacity on the central bank digital currency and hoped to roll out a pilot soon.

He was speaking on a panel alongside Sri Lanka`s central bank governor, P. Nandalal Weerasinghe, with both discussing monetary policy challenges in South Asia.

Ahmad said a new law would lay down the foundations for the licensing and regulation of the virtual assets sector and that the central bank was in touch with some tech partners.-Reuters