IN Pakistan’s economy, two forces that should, in theory, move in opposite directions are advancing paradoxically together: ubiquitous digital payments and a growing stock of cash. The State Bank of Pakistan reported in November 2025 that nearly 88 per cent of retail transactions are now conducted digitally. This includes ATM use, where an overwhelming majority of transactions are cash withdrawals.
Despite this, one continues to be puzzled by the currency in circulation, which has climbed to Rs10.9 trillion, accounting for more than a quarter of broad money. What appears as resistance to change or a failure of consumers to embrace technology is, in fact, reflective of a structural imbalance.
Pakistan, in the recent past, has expanded its digital payments ecosystem faster than it has improved the conditions that make digital money reliable everywhere; stable internet connectivity, adequate spectrum, device capability, and consumer confi
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