ISLAMABAD: Pakistan is exploring the tokenization of its existing Eurobond debt, Finance Minister Muhammad Aurangzeb said Monday, outlining a proposal that could open new avenues for digital financial transactions and sovereign debt management.
Speaking at a "Dialogue on Digital Assets and the Future of Banking" organized by the Pakistan Banks' Association in collaboration with LUMS, Aurangzeb said the government is holding discussions on the initiative and seeking Cabinet approval before issuing a request for proposals.
"We are reviewing at this point from the Ministry of Finance and Government of Pakistan, is tokenization of our existing Eurobond debt," he said. "We are in discussions at this point, and we are looking forward to the Cabinet approval on this, before we move ahead with issuing the RFP on this front."
The minister urged banks to take an active role in developing practical proposals for digital financial technologies.
"You bring the customer relationships, operational experience and risk management capabilities that this work requires," he said. "Invest in the expertise to assess these technologies and work with relevant regulators on the activities permitted within your mandates and, of course, with the support of your respective boards."
Pakistan has established a statutory framework for virtual assets under the Virtual Assets Act 2026, with the Pakistan Virtual Assets Regulatory Authority responsible for licensing and supervising virtual asset service providers.
The State Bank of Pakistan has also provided a conditional pathway for banks to offer services to PVARA-licensed businesses, subject to due diligence and segregation of client funds. However, restrictions remain in place on banks investing, trading or holding virtual assets using their own funds or customer deposits, the minister said.
Aurangzeb stressed that digital financial innovation must be accompanied by appropriate safeguards, regulatory oversight and cybersecurity measures.
"We all need to acknowledge that we are under attack 24/7 by state and non-state actors, and therefore there is no room for complacency," he said.
