Eurobond debt may be tokenised

Aurangzeb says digital assets must earn their place as banks keep restrictions

KARACHI:

The Ministry of Finance and the government are reviewing the possibility of tokenising Pakistan's existing Eurobond debt, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said, as he pressed banks to adopt digital assets responsibly while keeping restrictions on their own holdings of virtual assets.

Addressing a dialogue on digital assets and the future of banking organised by the Pakistan Banks' Association and LUMS, he said financial innovation should deliver lower-cost remittances, faster business payments, accessible financing for entrepreneurs and increased productive investment.

"Pakistan needs financial innovation, and digital assets must complement the broader digital transformation," he said.

He said digital transformation must be accompanied by strong regulatory safeguards, financial stability and institutional oversight so that technological advancement did not create unnecessary risks.

He said the government had achieved macroeconomic stability and was now focused on export-led growth through economic discipline, higher exports, foreign direct investment and private-sector participation.

He also said banks needed to facilitate businesses, particularly small and medium enterprises and agriculture, through easier access to financing.

Pakistan established a statutory framework through the Virtual Assets Act 2026, assigning the Pakistan Virtual Assets Regulatory Authority responsibility for licensing and supervising virtual asset service providers.

He said the next priority was effective implementation through capable supervision and institutional coordination.

The State Bank of Pakistan (SBP) has introduced a conditional mechanism for extending banking facilities to licensed entities, subject to due diligence and segregation of client funds.

The minister said accounts opened for entities holding no-objection certificates would serve a limited purpose until licensing was complete, and that banks remained responsible for foreign exchange compliance.

He said restrictions on banks investing, trading or holding virtual assets through their own funds or customer deposits would remain.

Aurangzeb said tokenisation could improve remittance channels, including transactions linked to Roshan Digital Accounts.

Pakistan received $41.6 billion in remittances last fiscal year, and first-quarter trends suggest inflows could exceed $44 billion.