LAHORE – Pakistan is exploring the possibility of converting its existing Eurobond debt into digital tokens, with the government awaiting cabinet approval before inviting proposals for the initiative, Finance Minister Muhammad Aurangzeb said on Monday.
Addressing a virtual conference on digital assets and the future of banking, organised by the Pakistan Banks’ Association in collaboration with LUMS, Aurangzeb said discussions were under way and the government planned to issue a request for proposals (RFP) once the cabinet granted its approval.
He said tokenisation could also offer new opportunities for remittances, noting that Pakistan received $41.6 billion in overseas remittances during the previous fiscal year. Inflows during the first quarter of the current fiscal year indicated that the annual figure could rise beyond $44 billion, he added.
Aurangzeb said digital financial services should be assessed on their ability to reduce transaction costs, improve access to financing and bring more people into the formal economy.
He emphasised that technological innovation must support Pakistan’s economic priorities as the country seeks to move from macroeconomic stabilisation towards sustainable growth through fiscal discipline, stronger exports and increased private investment.
Referring to international initiatives, the minister cited JPMorgan’s use of deposit tokens for blockchain-based transfers between institutional clients and the Bank for International Settlements’ Project Agora, which is examining the potential of tokenised deposits and central bank reserves for cross-border payments.
He stressed that banks would remain central to the financial system despite technological changes, particularly in areas such as customer protection, risk management and the security of funds.
The minister also called for clear distinctions between tokenised bank deposits, stablecoins and unbacked cryptocurrencies, saying each carried different risks and required an appropriate regulatory approach.
Aurangzeb said Pakistan had established a legal framework through the Virtual Assets Act 2026, which created the Pakistan Virtual Assets Regulatory Authority (PVARA) to license and supervise virtual asset service providers.
He said the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan were also contributing to the regulatory framework. Banks could provide services to businesses licensed by PVARA under specified conditions, including due diligence and the separation of customer funds.
However, restrictions preventing banks from investing in, trading or holding virtual assets through their own funds or customer deposits remained in place, he clarified.
Warning about cybersecurity threats, Aurangzeb urged banks and regulators to strengthen their defences against attacks by state and non-state actors as financial services become increasingly digital.
He also highlighted Pakistan’s participation in international discussions on blockchain and tokenisation, saying the country’s G-24 chairmanship would provide an opportunity to represent the concerns of developing economies.
Tokenisation involves creating digital representations of financial or physical assets on a blockchain, potentially allowing ownership records and transactions to be managed electronically.
The government had previously signed an agreement with Binance in December 2025 to explore tokenising up to $2 billion in government assets, including sovereign bonds, treasury bills and commodity reserves.
Pakistan also raised $3 billion through a dual-tranche Eurobond issuance in September 2026, offering securities with maturities of five-and-a-half and 10 years.
Aurangzeb called on banks and other stakeholders to submit practical recommendations to help shape the country’s digital asset policy.
