Pakistan’s hard pivot toward digitization

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• Pakistan’s population is young, increasingly turning to higher education and is generally interested in ICT: this has primed the country for a digital transformation.
• Pakistan’s government is attempting to embrace digitization through improving infrastructure, primarily through three national policies: Digital Pakistan Policy, Cyber Security Policy and Cloud First Policy.
• A key obstacle is data governance, with 85% of surveyed local government bodies reporting no active data policy.
• Pakistan is making digital assets a key pillar of its digital transformation, introducing the Pakistan Virtual Assets Regulatory Authority (PVARA), inviting international exchanges to enter the market and floating the idea of a strategic reserve of digital assets.

Among candidates for a digital revolution, Pakistan is in a uniquely promising position.

• Article summary
• Pakistan’s digital revolution
• State of digital transformation in Pakistan
• Education, people, demographics
• Prioritizing digital infrastructure
• Data governance problem
• Role of digital assets
• Unified effort for digitization push

It’s got a young, tech-savvy population and a fast-growing education sector. It’s also got a robust gig economy, with the fifth-largest freelancer market in the world.

At the same time, the status quo is especially ripe for digital disruption. One hundred million of the country’s 250 million inhabitants are considered unbanked, with large swathes of the economy operating on a cash-only basis. Broadband connectivity remains poor but is growing fast, while legacy government recordkeeping has been slow to move on from paper records, let alone embrace a pivot into fully digital or blockchain-based governance.

The net result of all this is that Pakistan holds enormous potential for a digital future: the challenge is how this can be unlocked and how fast. After functionally banning digital assets in 2018, the country now appears ready to pivot, with a slew of digital transformation policies and a newly established digital asset regulator.

State of digital transformation

The idea of national digitization is a broad one. In reality, it comprises many pillars, from payment infrastructure to civic engagement.

According to a report by GSMA, ‘Realising Pakistan’s Aspiration to become a Digital Nation’, published in 2024, there are five key components that must be in place before a national digital transformation can be effected:

• Infrastructure: Foundation upon which digital services and applications are created, stored, distributed, and consumed
• Innovation: Ability to create and integrate new technologies to enable a variety of new solutions and use cases for the economy
• Data governance: High data governance standards, with efforts to become more transparent, participatory, and accountable
• Security: Advanced cybersecurity measures to help businesses operate safely in a fully digital environment
• People: Change in culture and personal behavior, and the right levels of digital literacy skills to be able to navigate an evolving digital world

Assessing progress on any of these fronts can be tricky, but not impossible.

For example, the United Nations publishes two relevant indexes: the E-Government Development Index (EGDI) and the E-Participation Index (EPI).

The EGDI measures member states’ e-government policies against three broad dimensions: provision of online services, telecommunication connectivity, and human capacity. In this, Pakistan ranks 136rd, lagging behind neighboring India (97th), Bangladesh (100th), and Sri Lanka (98th).

The EPI measures the degree to which countries use online tools to promote interaction between the government and its people and among its people. In it, Pakistan ranks better, coming in at 88th.

These are hardly world-leading figures. But digitization is a fundamentally modern process, and any analysis of progress must be forward-looking. On that front, Pakistan fares much better. Perhaps the most important story is that both these rankings are trending in the right direction: Pakistan has been improving steadily, almost every year over the last ten years.

In any case, the story around Pakistan is where it’s headed, not where it’s been.

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Education and demographics

As indicated by GSMA’s fifth pillar, ‘people’, demographics will be critical to Pakistan’s digital journey.

Any discussion of Pakistan’s demographics has to start with size: with a population of over 250 million, Pakistan is the fifth-most populous country in the world. Critically, a third of that population is under 14. This has significant implications for how the coming decades will unfold for Pakistan, many of which will likely prove decisive for the country’s digital future.

Education may prove the key bottleneck. According to a 2025 report by the Asian Development Bank (ADB) titled ‘Pakistan’s Digital Ecosystem: A Diagnostic Report,’ just 13% of eligible 18-25 year olds are in university education, half of South Asia’s average of 25%.

As an elementary point, whatever the current statistics say about the number of citizens in higher education, they’re as low as they’re likely to be for a long time. Pakistan is young and is making efforts to develop its human capital.

The impact of this can already be seen. In 2000, there were 56 universities in Pakistan. By 2025, there were 262, and a 50% increase in overall student enrollment.

Encouragingly for the digital transformation project, there’s a strong interest in tech among the student body: of the 3.1 million-strong student population, 471,000 are enrolled in science, technology, engineering, or mathematics courses, according to the ADBk.

“Pakistan’s current university education environment is making progress in fostering digital skills, yet significant gaps remain in curriculum modernization and access to advanced technology,” explains Nasruminallah Mian, Senior Programs Officer in ADB’s Pakistan office and one of the authors of the ADB’s report on Pakistan.

“Asian Development Bank’s diagnostic work highlights the need for stronger industry-academia linkages and targeted investments to better drive digital change.’

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Priority one: Infrastructure

At the foundation of all past and future progress on this front is digital infrastructure.

It’s practically a truism to say that Internet connectivity is one of the most important determinants of a country’s ability to digitize. If citizens lack the physical means to connect to the Internet, then not only is large-scale digital progress impossible, but whatever progress is made risks alienating swathes of the population.

Consistent statistics on Internet penetration in Pakistan are elusive. According to Statista, 33.96% of the population accessed the Internet as of 2025, lagging significantly behind neighboring India (77.76%). Figures for mobile Internet tell a similar story. According to a 2024 report by GSMA, 81% of the adult population is covered by 3G or 4G, up from just 15% in 2010. Despite the coverage, just 23% of the population subscribed to mobile Internet.

The figures are mixed. However, what’s clear is that Pakistan is not only aware of its shortcomings on this front—it’s addressing them head-on. It has done this by introducing three key national policies, each aimed at addressing a different aspect of its infrastructure.

In 2018, the Ministry of IT and Telecom launched the Digital Pakistan Policy. Its vision is “to become a strategic enabler for an accelerated digitization ecosystem to expand the knowledge-based economy and spur socio-economic growth.”

As far as high-level government policy goes, the Digital Pakistan Policy 2018 is clear and cohesive: it identifies specific areas within the economy in need of attention and makes sensible recommendations for each. For example, in a section on ‘software exports,’ it identifies mobile application development, Big Data analytics and cloud computing as particular areas on which to concentrate efforts, among a suite of 16 recommendations. There are similarly comprehensive recommendations under categories such as ‘ICT for Girls,’ ‘Local Manufacturing of Hardware,’ and ‘e-Governance.’

Then there’s the Cyber Security Policy, introduced in 2021. This proposed a national, comprehensive cybersecurity framework aimed at protecting the country’s ICT infrastructure, framing the issue as one of national security.

In a similar vein, the 2025 ADB report recommended a nationwide campaign for cybersecurity awareness and hygiene. It notes that Pakistan ranks 79th worldwide for cybersecurity capabilities, while it has seen significant increases in cyberattacks in recent years.

“A whole-of-society cybersecurity and hygiene awareness-building campaign is needed. A significant hurdle is widespread lack of awareness about cybersecurity within the government, as well as among the general population,” read the report.

Lastly, there’s the Cloud First Policy, announced in 2022. It directs public sector organizations to prioritize cloud services for new and existing IT projects, creating a presumption that cloud services will be used unless an alternative can be justified.

The latest signal that Pakistan was committed to accelerating its digital infrastructure transformation came in August. There, it was announced that the government of Pakistan would abolish right-of-way charges on laying fibre optic cables and other digital infrastructure. These fees were for using public land, railways, and highways to lay cabling and had long been a source of friction for telecom companies looking to expand the country’s digital infrastructure.

“Scrapping right-of-way fees will accelerate the rollout of digital infrastructure, enabling faster and more widespread connectivity,” says ADB’s Nasruminallah Mian.

“This decision is likely to lower operational costs for service providers, making digital access more affordable for citizens.”

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Data management in Pakistan

This brings us to one of the key obstacles preventing a complete embrace of digital transformation in Pakistan: data and data governance (another of GSMA’s five key pillars of a digital nation).

In Pakistan, government data is siloed across different federal and local bodies, all operating under different legal and operational frameworks. For example, according to ADB, between 2016 and 2023, 40 different federal ministries developed independent E-Office platforms. Surveys conducted on provincial government departments found that 85% of respondents reported that they have no established practice of using data catalogs, no clarity on national data governance imperatives, and no compliance mechanisms for ensuring data quality.

The issue is receiving increased attention, however.

The ADB’s report recommends establishing a new Government Data Office, which would be tasked with data classification and categorization based on technology, sensitivity, usage, and value. It also recommends that all public sector entities assess their investment rate in data management initiatives and promote the use of AI and Big Data to enact change.

Earlier this year, Pakistan passed the Digital Nation Pakistan Act, which, among other things, discussed below, stated a goal to create a digital identity for citizens that could centralize social, economic, and governance data. One of the regulators established by the Act, the Pakistan Digital Authority, is specifically tasked with developing and enforcing a comprehensive data governance framework that would apply to entities across the public and private sectors and allow for standardized data exchange between entities.

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The ‘crypto’ question

Digital assets will clearly play a critical role in Pakistan’s digital journey. When Bilal Bin Saqib, Pakistan’s Minister of State for Blockchain and Crypto, attended the BTC 2025 conference in Las Vegas earlier this year, he said: “We have over 100 million unbanked people. They lack tools for saving, for investment, and we want to change that. We want them to break their economic classes. And I really believe that crypto and blockchain can help us take that quantum leap.”

“We want to tokenize our illiquid assets, we want to do digital IDs… Pakistan is looking for allies. Pakistan is looking for access. Because Pakistan wants to build.”

Just a few years earlier, such a statement would have been unthinkable. In 2018, the central bank prohibited financial institutions from processing digital asset transactions.

Not that this has significantly stunted the rising popularity of digital assets among Pakistanis. The ADB reported earlier this year that Pakistan ranks 8th in the world for digital asset adoption, largely driven by a volatile currency. It is estimated that Pakistanis own between $20 billion and $25 billion worth of digital assets.

Nonetheless, government caution has remained.

This hesitance is somewhat understandable. Until 2022, Pakistan was on the Financial Action Task Force’s (FATF) ‘grey list’, a register of countries kept by the international money laundering watchdog, which signifies deficiencies in their anti-money laundering (AML) strategies. Countries on the list are subject to close monitoring by the FATF.

Though its removal from the list shows the country has made strides to tackle money laundering in the jurisdiction, it also makes sense that Pakistan would be slow to embrace digital assets.

The reticence is undoubtedly softening, however.

“The global momentum toward digital asset acceptance has prompted Pakistan to review its digital change strategies, fostering greater openness to digital innovation,” says ADB’s Nasruminallah Mian.

“While the ADB’s digital sector diagnostics brings focus primarily on infrastructure and policy frameworks, there is also emphasis on the need for robust regulation in emerging areas such as AI and digital assets regulation and adoption to support sector growth.

“Developing clear digital asset regulations can accelerate digital sector development by attracting investment and enhancing trust in digital financial services.”

In January, the National Assembly passed the Digital Nation Pakistan Act 2025. It describes itself as an Act ‘to provide for the transformation of Pakistan into a digital nation, enabling a digital society, digital economy and digital governance.’

It directs the establishment of three new regulatory bodies responsible for different aspects of Pakistan’s digital vision:

• The National Digital Commission (NDC), which is chaired by the Prime Minister and sets the top-level strategy for digital transformation in Pakistan;
• The Pakistan Digital Asset Authority, which is tasked with developing and implementing the strategy set by the NDC;
• The Oversight Committee, which reviews the effectiveness of the Digital Asset Authority.

The Pakistan Digital Asset Authority formally became the Pakistan Virtual Assets Regulatory Authority (PVARA) in July. It is now Pakistan’s primary regulator for digital asset activities.

Top of the agenda at PVARA’s debut meeting was the 2018 ban by the central bank, which is still in force although somewhat undermined by the developments since its creation. As of the time of writing, it seems a foregone conclusion that the ban will be lifted.

Hot on the heels of that Act, Pakistan’s central bank announced a pilot project for a digital currency. Details were scant, but it is believed to offer a digital asset solution that connects with regular bank accounts, suggesting its primary purpose is enabling digital payments.

The country’s Minister of State for Blockchain and Crypto Bilal Bin Saqib also made two significant announcements at the BTC 2025 conference in Las Vegas: Pakistan would be establishing a ‘strategic Bitcoin reserve’ and would be earmarking 2,000 megawatts of electricity for bitcoin mining and AI data centers.

More recently, this month, PVARA put out a call for expressions of interest from international digital asset exchanges wanting to operate in the country, further signalling the government’s willingness to integrate into the global digital asset ecosystem.

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Unified efforts

In any national push for digitization, there will inevitably be many moving parts. Education, physical infrastructure, regulation, and countless other factors will each play determinative roles in how successful any such transformation will be.

Whether the individual initiatives taken by Pakistan to accelerate its digital transformation are successful remains to be seen. However, it’s encouraging that such initiatives exist. Government members, as well as those in the public and private sectors, are actively working to address the challenges and are taking concrete steps toward progress.

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