Pakistan weighs tokenising its Eurobond debt, with cabinet approval to come first

ISLAMABAD — Pakistan is looking at turning its existing Eurobond debt into digital tokens, Finance Minister Muhammad Aurangzeb said on Monday — but nothing moves until the cabinet signs off, and only then will the government invite formal proposals.

He was speaking virtually at the “Dialogue on Digital Assets and the Future of Banking”, put together by the Pakistan Banks’ Association with LUMS. “We are in discussions at this point in time, and we are looking forward to the Cabinet approval on this before we move ahead with issuing the RFP on this front,” he said.

What tokenisation would actually mean
Strip away the jargon and the idea is fairly plain: a bond’s ownership gets recorded as a digital token on a blockchain, so it can be held and transferred electronically. It does not wipe out the debt, and it does not change the interest owed. A Eurobond is simply government borrowing in a foreign currency — usually US dollars — raised from international investors, who are paid interest and get their principal back when the bond matures. Tokenisation would change how that borrowing is recorded and settled, not whether it has to be repaid.

Remittances are on the same list
Aurangzeb named remittances as another place where tokenisation could make sense. Pakistan received $41.6 billion in remittances last fiscal year, he said, and the pace of the first quarter of this fiscal year points to a figure above $44 billion this year. With money moving at that scale, he argued, a digital route is worth examining.

He framed the whole debate around a handful of practical tests. Can a family abroad send money home more cheaply? Can a business get paid sooner? Can an entrepreneur raise finance on reasonable terms? And can the country attract productive investment without putting the stability of its financial system at risk? Those outcomes, he said, should guide the discussion — not enthusiasm for the technology itself.

Banks, safeguards and the fine print
The minister pointed to examples already in use elsewhere: JPMorgan’s deposit tokens, which let institutional clients move money over blockchain networks, and the Bank for International Settlements’ Project Agora, which is testing how tokenised commercial bank deposits and central bank reserves could improve cross-border settlement.

He was just as keen to draw distinctions. A tokenised bank deposit, he said, remains a claim on a bank. A stablecoin’s risk depends on its issuer, its backing and its redemption arrangements. An unbacked cryptoasset carries a different set of risks altogether. Regulation, in his argument, has to reflect those differences and the economic activity behind each product, rather than treating every digital asset as the same thing.

Pakistan already has the legal scaffolding. The Virtual Assets Act 2026 created the Pakistan Virtual Assets Regulatory Authority (PVARA), which licenses and supervises virtual asset businesses. The task now, Aurangzeb said, is to make that framework work in practice, with capable supervision and clear coordination between institutions. The State Bank has opened a conditional route for banks to serve PVARA-licensed businesses, subject to due diligence and the segregation of client funds — while the ban on banks investing, trading or holding virtual assets with their own funds or customer deposits stays in place.

On cybersecurity he left no room for comfort. The financial sector, he said, is “under attack 24/7” by state and non-state actors, and there is “no room” for complacency as digital tools spread.

The background
This is not a cold start. In December 2025 the government signed a memorandum of understanding with Binance to explore tokenising up to $2 billion in government assets, including sovereign bonds, treasury bills and commodity reserves. In September 2026 it raised $3 billion through a dual-tranche Eurobond issue, with maturities of five-and-a-half and 10 years. And in late September it co-convened a dialogue in New York with the UN Office for Digital and Emerging Technologies on blockchain and a tokenised future.

Others in the room on Monday included PVARA chairman Bilal Bin Saqib, State Bank Deputy Governor Saleem Ullah, SECP Commissioner Imtiaz Haider and JPMorgan’s global co-head of payments, Umar Farooq — a sign of how widely the banking and regulatory establishment is now engaged in the conversation.

What is not decided yet matters as much as what was said. There is no final decision, no timetable, and no request for proposals on the table until the cabinet approves. Aurangzeb closed by asking banks and other stakeholders for practical recommendations — the kind of detail, he suggested, that will decide whether tokenisation becomes a useful tool for Pakistan or just another fashionable phrase.