Pakistan is considering the tokenization of its existing Eurobond debt as part of the government’s efforts to explore blockchain-based financial instruments and expand the use of digital assets within the financial system. Finance Minister Muhammad Aurangzeb said the proposal is currently awaiting cabinet approval, after which the government plans to issue a Request for Proposal (RFP) to move the initiative forward. He shared the development while addressing a Pakistan Banks Association dialogue on digital assets and the future of banking, where he discussed the potential role of tokenization in financial markets, banking services and cross-border transactions.
The government is also examining the use of tokenization for Roshan Digital Accounts and remittance services, with the objective of improving financial access and transaction efficiency. Aurangzeb said Pakistan received $41.6 billion in remittances during the previous fiscal year and could exceed $44 billion in the current fiscal year based on the performance recorded during its first quarter. He indicated that digital asset applications could support the country’s remittance flows by reducing transaction costs and improving the delivery of funds to recipients.
Aurangzeb said digital assets should demonstrate practical benefits before becoming an established part of the financial system. Their value, he explained, should be measured through their ability to lower the cost of doing business, bring more people into the formal economy and improve access to financial services. He highlighted the importance of making overseas transfers more affordable for families, enabling businesses to receive payments faster and helping entrepreneurs obtain financing on reasonable terms. These benefits, he said, must be achieved while protecting financial stability and maintaining appropriate safeguards.
The finance minister said Pakistan had moved away from prohibition and regulatory uncertainty towards a statutory supervisory framework through the Virtual Assets Act 2026. Under the framework, the Pakistan Virtual Assets Regulatory Authority (P-VARA) is responsible for licensing and supervising virtual asset service providers. Aurangzeb said the framework was established within months, but stressed that its effectiveness would depend on strong supervisory capacity, clear institutional coordination and consistent implementation. He also acknowledged the roles of the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) in developing the regulatory approach.
On banking access, Aurangzeb said the SBP had established a conditional pathway allowing P-VARA-licensed businesses to access banking services, subject to due diligence requirements and the segregation of client funds. Accounts for businesses holding no-objection certificates have a more restricted purpose while they complete the licensing process. Banks remain responsible for complying with foreign exchange regulations, while existing restrictions on banks investing in, trading or holding virtual assets using their own funds or customer deposits continue to apply.
The minister emphasized that digital asset regulation must distinguish between different products rather than treating all tokenized instruments as having identical risks. A tokenized bank deposit represents a claim on the issuing bank, while the risk profile of a stablecoin depends on its issuer, underlying backing and redemption arrangements. Unbacked crypto assets carry a separate set of risks and require a different regulatory assessment. These distinctions, he said, are important as financial institutions explore new technologies and products.
Pakistan is also participating in international discussions on blockchain and tokenized financial systems. Aurangzeb said Pakistan’s Permanent Mission to the United Nations and P-VARA’s chairman co-convened a dialogue on blockchain and the tokenized future with the United Nations Office for Digital and Emerging Technologies in New York in late September. He added that Pakistan’s assumption of the G24 chairmanship could provide an opportunity to contribute to discussions on digital finance and development priorities across the Global South.
Citing international developments, Aurangzeb referred to JPMorgan’s use of deposit tokens for institutional clients and the Bank for International Settlements’ Project Agora, which is testing the use of tokenized commercial bank deposits and central bank reserves for cross-border settlement. He said these initiatives demonstrate the continuing importance of banks in the development of tokenized financial infrastructure. The minister urged Pakistani banks to develop practical proposals, build internal expertise to evaluate emerging technologies and engage with regulators on activities permitted under their respective mandates.
Aurangzeb also highlighted cybersecurity as a major concern for the financial sector, warning that financial systems face continuous attacks from state and non-state actors. He said there was no room for complacency as Pakistan advances its digital finance agenda. The government’s proposed Eurobond tokenization initiative and other digital asset applications will therefore need to balance technological development with regulatory compliance, operational resilience and financial security.
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