Pakistan weighs tokenising Eurobond debt, seeks cabinet approval

Finance Minister Muhammad Aurangzeb said on Monday that the government is examining whether to tokenise Pakistan's existing Eurobond debt, and will seek cabinet approval before it issues a request for proposals for the work.

He told a "Dialogue on Digital Assets and the Future of Banking", organised by the Pakistan Banks' Association with LUMS, that discussions were under way inside the Ministry of Finance. Business Recorder reported that the minister gave no detail on which Eurobonds would be covered, the size of the debt involved, or when the request for proposals would be issued.

"We are reviewing at this point from the Ministry of Finance and Government of Pakistan, is tokenization of our existing Eurobond debt. 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," he said.

Tokenisation means issuing a digital representation of an asset, in this case a debt instrument, that can be recorded and traded on a distributed ledger.

Aurangzeb asked banks to bring forward workable proposals. "You bring the customer relationships, operational experience and risk management capabilities that this work requires. 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 set up a statutory framework for virtual assets under the Virtual Assets Act 2026, which gives the Pakistan Virtual Assets Regulatory Authority the job of licensing and supervising virtual asset service providers.

The State Bank of Pakistan has opened a conditional route for banks to serve businesses licensed by the authority, subject to due diligence and the segregation of client funds.

Banks are still barred from investing in, trading or holding virtual assets with their own funds or with customer deposits, the minister said.

He said digital financial innovation had to come with safeguards, regulatory supervision and cybersecurity. "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."