ISLAMABAD: Pakistan has set a Dec. 31 deadline to make its capital Islamabad the country's first fully cashless city, with government offices set to stop accepting cash payments from Dec. 1, a senior official said on Friday.

The initiative is part of Prime Minister Shehbaz Sharif's broader push to digitize Pakistan's largely cash-dependent economy, improve financial transparency and bring more businesses into the formal tax system. Authorities are expanding digital payment facilities across the country, including through the central bank's Raast instant payment platform, as they seek to reduce reliance on cash transactions.

"After November 30, no cash payments will be accepted in any department of the Islamabad Capital Territory administration or the Capital Development Authority," Minister of State for Interior Talal Chaudhry said, according to an official statement issued after a meeting he chaired in Islamabad.

Chaudhry said the government aimed to bring all merchants in the capital onto digital payment systems by Dec. 31, from roadside vendors and small shops to large commercial establishments.

He said more than 26,000 merchants in Islamabad had already been connected to digital payment systems.

The minister said Interior Minister Mohsin Naqvi had pledged to Sharif that Islamabad would become Pakistan's first cashless city and the world's first cashless capital.

Chaudhry said the transition would improve financial transparency, strengthen tax monitoring and make transactions more efficient. Banking sector representatives assured the government of their support for the project.

Pakistan has been expanding digital payment infrastructure as part of a nationwide initiative launched in June 2025 to promote financial inclusion, document economic activity and reduce dependence on cash.

The government said on Thursday that the number of active merchants accepting digital payments nationwide had risen from 500,000 to 2.03 million under the initiative, while the overall volume of digital payments had doubled in a year.

The State Bank of Pakistan's Raast system allows individuals and businesses to make instant digital payments, including through QR codes that customers can scan using banking and payment applications.

At a meeting last week, Sharif directed authorities to prepare a roadmap for a fully digital payment system across the country, while ensuring reliable internet access and making digital services easier for consumers to use.