Pakistan weighs tokenising Eurobonds as cabinet approval awaited
Pakistan is exploring whether to turn its existing Eurobond debt into blockchain-based digital tokens, with the government waiting on cabinet approval before it invites proposals, Finance Minister Muhammad Aurangzeb said on Monday.
Speaking at a virtual conference on digital assets and the future of banking organised by the Pakistan Banks' Association with LUMS, Aurangzeb said discussions were under way and the government planned to issue a request for proposals once the cabinet gave its approval. He said tokenisation could also open new opportunities for remittances, noting that Pakistan received $41.6 billion in overseas remittances in the previous fiscal year, and that first-quarter inflows suggested the annual figure could rise beyond $44 billion.
Aurangzeb said digital financial services should be judged on whether they cut transaction costs, improve access to financing and bring more people into the formal economy. He 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 tokenised deposits and central bank reserves for cross-border payments, and stressed that banks would remain central to the financial system in customer protection, risk management and the security of funds.
The minister called for clear distinctions between tokenised bank deposits, stablecoins and unbacked cryptocurrencies, saying each carried different risks and needed an appropriate regulatory approach. He said Pakistan had established a legal framework through the Virtual Assets Act 2026, which created the Pakistan Virtual Assets Regulatory Authority to license and supervise virtual asset service providers, with the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan also contributing. Banks may serve PVARA-licensed businesses under specified conditions, including due diligence and separation of customer funds, but remain barred from investing in, trading or holding virtual assets through their own funds or customer deposits, he said.
Aurangzeb warned banks and regulators to strengthen defences against cyber attacks by state and non-state actors as financial services become more digital, and said Pakistan's G-24 chairmanship would give it a chance to represent developing economies in international discussions on blockchain and tokenisation. The government 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, and raised $3 billion through a dual-tranche Eurobond issuance in September 2026 with maturities of five-and-a-half and 10 years. He urged banks and other stakeholders to submit practical recommendations to shape digital asset policy.
