Pakistan explores tokenisation of existing Eurobond debt, says Aurangzeb
Pakistan is exploring the tokenisation of its existing Eurobond debt, said Finance Minister Muhammad Aurangzeb on Monday, while addressing the “Dialogue on Digital Assets and the Future of Banking”, organised by the Pakistan Banks’ Association (PBA) in collaboration with LUMS. The finance minister shared that the government is holding discussions on the proposed initiative and is seeking Cabinet…
Finance Minister Muhammad Aurangzeb revealed on Monday that Pakistan is exploring the tokenization of its existing Eurobond debt, during a discussion at the "Dialogue on Digital Assets and the Future of Banking" organized by the Pakistan Banks’ Association (PBA) in collaboration with LUMS. The government is currently holding talks on the idea and is awaiting Cabinet approval before issuing a request for proposals (RFP).
Aurangzeb emphasized that discussions are ongoing and a Cabinet decision is anticipated before the RFP process commences. The initiative seeks to leverage tokenization for managing sovereign debt, potentially creating new opportunities for digital financial transactions and investments. Aurangzeb called upon banks to actively participate in developing practical proposals encompassing digital financial technologies.
He urged the banks to leverage their customer relationships, operational expertise, and risk management capabilities in assessing these technologies and collaborating with regulators within their regulatory mandates, while seeking their boards’ support. Pakistan has enacted a statutory framework for virtual assets via the Virtual Assets Act 2026, with the Pakistan Virtual Assets Regulatory Authority (PVARA) tasked with licensing and supervising virtual asset service providers.
The State Bank of Pakistan has also paved a conditional pathway for banks to provide services to PVARA-licensed businesses, contingent upon due diligence and the segregation of client funds. However, banks are forbidden from investing, trading, or holding virtual assets using their own funds or customer deposits, according to Aurangzeb.
He reiterated that the adoption of digital financial innovations must be accompanied by stringent safeguards, regulatory oversight, and robust cybersecurity measures. Aurangzeb cautioned that the cybersecurity landscape faces constant threats from state and non-state actors, and therefore, complacency is inadvisable.
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