Pakistan is considering tokenising its existing Eurobond debt, Finance Minister Muhammad Aurangzeb has said, in a signal of how seriously the government is now taking digital assets. The minister spoke at a dialogue on digital assets in Karachi, organised by the Pakistan Banks’ Association and LUMS, where banks were urged to introduce digital assets responsibly.
Tokenisation, in this context, means representing a financial asset — in this case, Eurobond debt — in digital token form on a blockchain or similar system. Supporters argue that tokenised bonds can be traded more efficiently, settled faster, and opened to a wider range of investors, including smaller participants who might be shut out of conventional bond markets. Critics caution that tokenisation does not by itself change the underlying debt burden: the government would still owe the same money, and the risks of market volatility, regulation and technology would need careful management.
The minister’s remarks are best read as an exploration, not a completed policy. The Finance Ministry is considering the idea, according to reporting on the dialogue. No timetable, size, or structure for a tokenised Eurobond issue is recorded in the brief for this report, and none is claimed here. The distinction matters: considering tokenisation is a step toward possible innovation, but it is not the same as launching a tokenised bond.
At the same event, banks were called upon to introduce digital assets responsibly. That call reflects a balance the authorities are trying to strike. On one hand, digital assets and blockchain technology are seen as potentially useful for payments, trade finance and capital markets. On the other, they carry risks around fraud, money laundering, consumer protection and financial stability, which regulators worldwide are still learning to manage. A responsible introduction, in this framing, means building proper controls, disclosures and risk management before scaling up.
Importantly, existing restrictions remain in force. Banks are still restricted from investing, trading or holding virtual assets using their own funds or clients’ funds. That restriction has been a defining feature of Pakistan’s cautious approach to cryptocurrencies and virtual assets, and the minister’s remarks do not lift it. Banks interested in digital assets must therefore work within the current regulatory perimeter, unless and until the authorities change the rules through a formal process.
The legal backdrop has shifted, however, with Pakistan’s adoption of the Virtual Assets Act 2026. That law gives the Pakistan Virtual Assets Regulatory Authority powers over licensing and supervision in the virtual assets space. A dedicated regulator with licensing powers is a step toward a formal framework, replacing an environment in which virtual asset activity existed largely outside clear oversight. How the authority uses those powers — which activities it licenses, what standards it sets, and how strictly it enforces them — will shape whether Pakistan’s digital asset market develops in an orderly way.
The Karachi dialogue itself, bringing together the banking association and LUMS, illustrates the mix of practitioners and academics now engaged in the debate. Banks bring questions of payments, custody and compliance; universities bring research on technology, economics and regulation. A conversation that includes both is more likely to produce workable proposals than one driven by hype alone.
For ordinary savers and investors, the immediate message is one of caution and patience. Tokenised Eurobonds, if they ever materialise, would be a sovereign debt instrument in a new form, not a new kind of risk-free return. Virtual assets more broadly remain restricted for banks, and the new regulatory authority is still establishing its framework. Anyone encountering offers linked to digital assets should check whether the provider is licensed and understand the risks before committing funds.
What to watch next is whether the Finance Ministry moves from consideration to a concrete proposal, and how the Virtual Assets Regulatory Authority begins licensing and supervising activity under the 2026 Act. Until then, the verified position is clear: tokenisation of Eurobond debt is under consideration, banks are urged to act responsibly, and current restrictions on banks’ virtual asset activity remain in place.
Source: Express Tribune
