This piece is posted in Finextra and announces a partnership between National Institutional Facilitation Technologies, a bank-led organization and the foremost payments operator in Pakistan, and the 2019 Silicon Valley startup M10 Networks, which provides a platform for digital currency management. Pakistan is catching up to the modernization trend, and in some ways this effort is similar to their neighbor India’s efforts over the past decade to further digitize commerce across the national spectrum. This is a B2B effort and recognizes the growing potential influence of cryptos (especially CBDCs and stablecoins) in trade preferences during the 5-10 year coming window.
‘The partnership between M10 and NIFT was developed in response to the 2021 overhaul of tax laws by Pakistan’s Federal Board of Revenue, which requires companies to make digital payments for expenditures of more than Rs250,000…
Under the agreement, NIFT will act as the local operator of the M10 platform and use the M10 shared hierarchical ledger and digital authorisation technology to authorize digital payments. NIFT will settle digital payments using its existing settlement mechanisms and in compliance with local regulations. Subject to regulatory approval, M10 and NIFT will work together, along with nine local participating banks, to enable the authorization of commercial payments between commercial entities in Pakistan.’
While we have not received a briefing and thus have no real details as to the underlying tenor, etc., the M10 platform is a CBDC and stablecoin enabler, and as far as we can tell is not promoting its own digital coin (we don’t know how or whether there is any connection with global football star Mesut Ozil). The effort is at this point is perhaps similar to other distributed ledger networks, which have been to some extent fueling innovation in cross-border transactions.
‘“M10’s turnkey solution offers central banks and participating commercial banks everywhere the ability to quickly realize the benefits of digital payments in full compliance with today’s regulation and without disruption to their conventional systems,” says Marten Nelson, CEO and Co-founder, M10 Networks. “Our shared, hierarchical ledger technology supports secure, low-cost B2B and cross-border payments and can process up to one million transactions per second. With NIFT acting as a local operator, the M10 platform will contribute significantly to the modernization of Pakistan’s payment infrastructure and enable participating local banks to easily comply with the country’s new tax regulations.”’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group