Pakistan is preparing to explore the tokenization of its existing Eurobond debt, with the government seeking Cabinet approval before launching the process.
Finance Minister Muhammad Aurangzeb revealed the plan on Monday during a dialogue on digital assets and the future of banking, organized by the Pakistan Banks’ Association in collaboration with LUMS.
Aurangzeb said the Ministry of Finance is examining the possibility of converting existing sovereign debt into digital tokens. The government plans to secure Cabinet approval before issuing a request for proposals (RFP) to move the initiative forward.
The proposal is still under review, and the government has yet to finalize its structure or begin the procurement process.
Tokenization involves representing ownership or financial claims over assets through digital tokens recorded on a blockchain or similar technology. In Pakistan’s case, the proposed exercise would explore how the technology could be applied to existing Eurobond liabilities.
Pakistan Moves Ahead With Digital Asset Regulations
Aurangzeb also urged commercial banks to take a more active role in developing digital financial services, arguing that their customer networks, operational capabilities and risk management systems could help shape the country’s digital finance landscape.
He asked banks to develop practical proposals, build the necessary technical expertise and work with regulators to ensure new financial activities remain within permitted regulatory boundaries.
Pakistan has already introduced a legal framework for virtual assets through the Virtual Assets Act 2026, establishing the Pakistan Virtual Assets Regulatory Authority (PVARA) to license and supervise virtual asset service providers.
The State Bank of Pakistan (SBP) has also introduced a conditional framework allowing banks to provide banking services to businesses licensed by PVARA.
These arrangements are subject to due diligence requirements and safeguards, including the separation of customer funds.
However, banks are still prohibited from investing in, trading or holding virtual assets using their own funds or customer deposits.
Aurangzeb stressed that digital financial innovation must go hand in hand with regulatory supervision, security arrangements and cybersecurity protections. He also warned that Pakistan faces persistent cyber threats from both state and non-state actors.
The proposed Eurobond tokenization initiative is part of the government’s broader effort to explore digital assets and modernize financial markets. Its next major step remains Cabinet approval, followed by the proposed RFP process.
