Pakistan is positioning itself to regulate and utilise artificial intelligence and tokenization as emerging technologies reshape financial institutions, capital markets and the movement of value globally. Minister of State and Pakistan Virtual Assets Regulatory Authority (PVARA) Chairman Bilal Bin Saqib outlined the country’s approach to emerging financial technologies while speaking at the inaugural Silk Road Finance & Technology Forum in Tashkent. He participated in a session titled “Regulating the Frontier: AI & Tokenization Spotlight,” alongside senior central bank officials from Cambodia and Azerbaijan, where he discussed the need for regulatory institutions to evolve alongside rapidly developing technologies.
Bin Saqib said governments need regulatory institutions that can keep pace with technologies developing faster than traditional policy cycles. He argued that the speed at which artificial intelligence, blockchain-based systems and tokenized financial products are evolving requires regulators to adopt more technology-enabled approaches. According to him, regulators will increasingly need their own digital capabilities to maintain effective oversight, compliance and systemic stability as financial markets become more automated and technology-driven.
Discussing Pakistan’s approach to virtual assets, Bin Saqib referred to the restrictions introduced in 2018 and said they had not eliminated activity involving digital assets. Instead, he said those restrictions pushed activity towards offshore platforms and peer-to-peer channels, leaving consumers with limited protection. The shift in policy has since moved towards establishing a formal regulatory framework designed to bring virtual asset activity under institutional oversight.
Pakistan has now enacted the Virtual Assets Act, 2026, establishing PVARA as the dedicated regulator for the country’s virtual asset sector. According to Bin Saqib, PVARA has subsequently notified its licensing regulations and opened a licensing portal for virtual asset service providers. The framework is intended to provide a formal regulatory structure for businesses operating in the digital asset sector while establishing requirements for entities seeking to provide virtual asset-related services in Pakistan.
The PVARA chairman also highlighted the role of the State Bank of Pakistan in supporting the regulated virtual asset ecosystem. He referred to SBP Circular 10, which allows regulated banks to provide accounts to licensed virtual asset service providers, including segregated client-money accounts. The measure creates a banking channel for licensed entities operating within the regulatory framework and provides a mechanism through which client funds can be maintained separately under applicable arrangements.
Artificial intelligence was another major focus of Bin Saqib’s address. He said AI would not only change financial products and services but could also transform the institutions responsible for supervising them. As financial activity becomes increasingly automated, regulators will need to use technology themselves to maintain oversight and ensure that compliance systems can keep pace with the speed and scale of market activity.
He said AI-driven financial markets could operate at speeds that traditional regulatory processes may struggle to match. This creates a requirement for regulatory bodies to develop technology-enabled systems capable of monitoring activity, identifying risks and supporting compliance. Bin Saqib’s comments placed regulatory technology alongside AI development as an important component of Pakistan’s broader financial technology agenda.
On tokenization, Bin Saqib described the technology as a major change in the way financial assets can be issued, distributed, settled and owned. He said tokenization could extend beyond digital assets into areas including sovereign debt, real-world assets, payments, settlement systems and private capital. By representing assets through regulated digital infrastructure, tokenization could potentially change the way investors access and transact in financial products.
Bin Saqib said PVARA and the State Bank of Pakistan are studying a model for a digitally native sovereign note that could be issued using regulated blockchain infrastructure. Under the model being considered, the instrument could settle on the same day and remain interoperable with Pakistan’s existing financial system. Such a structure could potentially reduce investment ticket sizes and settlement times while increasing transparency within the investment process.
The proposed digitally native sovereign product could also have implications for access to Pakistan’s financial markets, particularly for members of the Pakistani diaspora. By using digital infrastructure to reduce transaction and settlement barriers, the model could potentially make certain investment products accessible to a broader group of investors. The initiative remains under study, and the comments describe a model being considered by PVARA and SBP rather than an already launched financial product.
Bin Saqib also highlighted the potential of tokenized real-world assets and their relationship with payments, settlement and private capital. He suggested that the technology could be applied across multiple parts of the financial system as regulatory infrastructure develops. This could create new avenues for financial institutions, technology companies and investors to develop products operating within a regulated digital framework.
The PVARA chairman further emphasised the role of Pakistan’s young population in the development of emerging technology industries. He said young Pakistanis should move beyond being consumers of new technologies and become builders of companies and financial infrastructure around AI, blockchain and related technologies. He pointed to PVARA’s regulatory sandbox as a supervised environment where businesses can test products involving tokenization, payments, digital asset custody and compliance technology.
The regulatory sandbox is intended to provide a controlled environment for testing emerging financial technology products before wider market deployment. According to Bin Saqib, this approach can give technology companies an opportunity to develop and assess new products while operating within a supervised framework. Areas under consideration include tokenized financial products, payment solutions, digital asset custody and technologies designed to support regulatory compliance.
Bin Saqib also said he wants young Pakistanis to view AI and blockchain not merely as tools but as industries around which companies can be built. He pointed to the convergence of the two technologies as a potential foundation for a new generation of highly automated businesses. According to him, such businesses could increasingly operate with small teams and sophisticated automated systems, including what he described as agentic business models.
Pakistan’s emerging regulatory approach therefore combines formal oversight of virtual assets with a broader effort to prepare financial institutions and regulators for AI-driven markets. The Virtual Assets Act, establishment of PVARA, licensing framework, regulated banking access for licensed virtual asset service providers and the regulatory sandbox represent components of the country’s evolving digital finance structure.
Bin Saqib said Pakistan’s broader objective is to establish the regulatory clarity and institutional capacity required to compete in the future financial economy. His remarks in Tashkent highlighted a policy direction in which AI, blockchain, tokenization and digital financial infrastructure are treated as areas requiring both regulatory oversight and opportunities for domestic technology companies to develop new products and services.
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