PVARA chief says Pakistan must help write digital finance rules

A state minister called on Pakistan to help write the rules for digital finance rather than remain a buyer of systems built elsewhere, speaking at a Lahore University of Management Sciences (LUMS) dialogue on "Digital Assets and the Future of Banking" on Monday.

Minister of State and Pakistan Virtual Assets Regulatory Authority (PVARA) chairman Bilal bin Saqib said blockchain and tokenisation could lower the cost of moving money and widen access to investment beyond cryptocurrency trading. He spoke in conversation with Pakistan Banks Association chairman Zafar Masud.

Bilal said remittances of about $41 billion a year still travel through infrastructure built decades ago. Trimming transaction costs by two to three per cent would leave roughly $1 billion more in the hands of households, he said.

"The question is whether we want to rent our future or own our future," he said.

He said Pakistan was absent from the rooms where international correspondent banking and card payment rules were set and still bears the cost of that exclusion. The country should now work with banks and the State Bank of Pakistan on rules that permit innovation without weakening financial stability, he said, adding that doing nothing may cost more than acting in time.

Finance Minister Muhammad Aurangzeb, addressing the same event by video link, said digital assets must show measurable economic benefit before they enter Pakistan's financial system, Daily Times reported.

He listed cheaper remittances, faster business payments, affordable financing for entrepreneurs and productive investment as the tests to apply. Pakistan was moving from macroeconomic stability towards sustainable growth, he said, which needs fiscal discipline, stronger exports and private investment as well as an efficient financial system.

Aurangzeb said the Virtual Assets Act 2026 gives PVARA the job of licensing and supervising virtual asset service providers, and that implementation with the State Bank and the Securities and Exchange Commission of Pakistan is the next priority. He said the State Bank has issued a conditional framework for banks serving PVARA-licensed businesses, subject to due diligence and separation of client funds, and that the Ministry of Finance is examining whether to tokenise Pakistan's Eurobond debt.

He separated tokenised bank deposits, which remain claims on banks, from stablecoins, whose risk depends on the issuer and backing, and from unbacked crypto assets. Banks would stay central because they safeguard money and manage risk, he said, citing JPMorgan's use of deposit tokens for institutional transfers.

Aurangzeb also warned about cyber threats, pointing to hacking incidents involving European supermarkets, payment applications and cryptocurrency exchanges.

Daily Times reported that Bilal named JPMorgan, HSBC, Citibank and BNY among institutions building blockchain-based financial products.