Pakistan stabilizes exchange rate, builds cross-border payment system with WLFI stablecoin

Pakistan is promoting a new digital payment method to mitigate exchange rate volatility in international currency transactions. This week, the Pakistani government signed a memorandum of understanding with an affiliate of World Liberty Financial (WLFI), a cryptocurrency project associated with the Trump family, to establish a regulated stablecoin-based cross-border settlement cooperation. Securing long-term stability of the Pakistani exchange rate is considered one of the main objectives of this agreement.

Significance of Collaboration with SC Financial

The Pakistan Virtual Asset Regulatory Authority (PVARA) explained that this memorandum of understanding with SC Financial Technologies will serve as a new foundation for technological cooperation. SC Financial Technologies is an affiliate of WLFI and will provide technical capabilities to modernize Pakistan’s financial system.

This cooperation aims beyond simple technology adoption to integrate with the digital payment system of the Pakistan central bank. Finance Minister Muhammad Aurangzeb emphasized, “Our strategy is to collaborate with reliable global partners and verify that it aligns with regulations, stability, and national interests.”

Structure of the Stablecoin-Based Payment Infrastructure

The core of this agreement is to integrate a USD-pegged 1-dollar stablecoin into Pakistan’s compliant payment framework. Stablecoins are digital assets linked to the US dollar with minimal price volatility, making them useful for alleviating Pakistan’s exchange rate instability.

According to Reuters, SC Financial will collaborate with the central bank to technically review how stablecoins can operate alongside Pakistan’s developing digital payment system. This will open the way for domestic financial infrastructure to align with international standards.

International Remittances and Regulatory Framework

This cooperation model is expected to significantly improve Pakistan’s international remittance efficiency. Stablecoins offer a faster and cheaper alternative to existing international remittance systems, especially eliminating exchange rate risk.

Pakistani regulators see this transaction as presenting a new model for regulated stablecoin-based settlement and believe it will influence future regulatory framework development. As major countries like the US continue exploring the integration of stablecoins into financial systems, Pakistan’s recent initiative is viewed as a move in line with global trends.

As stablecoin technology expands, new options for hedging exchange rate volatility in Pakistan are emerging, which could lead to strengthened financial stability in the country.