Pakistan Weighs Tokenizing Eurobond Debt as Digital Asset Framework Takes Shape
Finance Minister Muhammad Aurangzeb says the government is reviewing a proposal to tokenize existing sovereign Eurobond liabilities and will seek Cabinet approval before issuing a request for proposals.
Pakistan is exploring the use of digital tokenization to manage its existing Eurobond debt, with the government planning to seek Cabinet approval before formally moving ahead with the initiative, Finance Minister Muhammad Aurangzeb said on Monday.
Speaking at 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 currently reviewing the proposal, which would examine how tokenization could be applied to the country's existing sovereign debt. The government is holding discussions on the idea and expects to obtain Cabinet clearance before issuing a request for proposals, he added.
The proposal is at an early stage, and no final decision has been made. If pursued, it would look at whether tokenization could create new avenues for digital financial transactions and investment linked to Pakistan's Eurobond liabilities. The government has not yet finalized the plan or begun the RFP process.
Aurangzeb called on banks to help develop practical proposals involving digital financial technologies, pointing to their customer relationships, operational experience and risk management capabilities. He urged financial institutions to invest in the expertise needed to assess emerging technologies and to coordinate with regulators on activities permitted under their mandates.
The push comes as Pakistan builds out its regulatory architecture for digital assets. A statutory framework has been established under the Virtual Assets Act 2026, with the Pakistan Virtual Assets Regulatory Authority (PVARA) responsible for licensing and supervising virtual asset service providers. The State Bank of Pakistan has also introduced a conditional mechanism allowing banks to serve PVARA-licensed businesses, subject to due diligence and the segregation of client funds. Banks, however, remain barred from investing in, trading or holding virtual assets using their own funds or customer deposits.
Aurangzeb stressed that digital financial innovation must be backed by regulatory oversight, appropriate safeguards and strong cybersecurity measures, warning that the country faces continuous threats from state and non-state actors. The remarks signal that the government intends to move cautiously, pairing any debt-related tokenization effort with tighter supervision of the broader virtual asset sector.
