Govt Plans to Turn Eurobond Debt Into Digital Tokens

Pakistan is considering the employ of digital tokenization to manage its existing Eurobond debt, with the administration seeking Cabinet approval before moving forward with the proposed initiative.

Key points

• The proposed initiative would examine how tokenization could be applied to Pakistan's existing Eurobond liabilities, potentially creating new avenues for digital financial transactions and investment.
• Aurangzeb called on banks to contribute to the development of practical proposals involving digital financial technologies, citing their customer relationships, operational experience and risk management capabilities.
• Nevertheless, banks remain prohibited from investing, trading or holding virtual assets using their own funds or customer deposits.
• Obtain the latest business news, market insights, and economic updates wherever you prefer.
• The Ministry of Finance is at present reviewing the proposal.

Finance Minister Muhammad Aurangzeb disclosed the plan on Monday during a dialogue on digital assets and the future of banking organized by the Pakistan Banks' Association in collaboration with LUMS.

In practice, the Ministry of Finance is at present reviewing the proposal. It would involve exploring the tokenization of existing sovereign debt. Aurangzeb remarked the administration is holding discussions on the initiative and expects to obtain Cabinet approval before issuing a request for proposals (RFP). Finance Minister Announces 3 Goals.

Notably, the proposed initiative would examine how tokenization could be applied to Pakistan's existing Eurobond liabilities, potentially creating new avenues for digital financial transactions and investment. Nevertheless, the administration has yet to finalize the proposal or commence the RFP process. Pakistan's Digital Asset Framework and Banking Regulations.

He pressed financial institutions to invest in the expertise needed to assess emerging technologies and coordinate with regulators on activities permitted under their respective mandates.

Pakistan has established a statutory framework for virtual assets under the Virtual Assets Act 2026, with the Pakistan Virtual Assets Regulatory Authority (PVARA) responsible for licensing and supervising virtual asset service providers.

For context, the State Bank of Pakistan has additionally introduced a conditional mechanism allowing banks to provide services to PVARA-licensed businesses, subject to due diligence requirements and the segregation of client funds.

Nevertheless, banks remain prohibited from investing, trading or holding virtual assets using their own funds or customer deposits. SBP Wants Fintechs to Have More Access to Banking Data.

Aurangzeb emphasized that digital financial innovation must be backed by regulatory oversight, appropriate safeguards and cybersecurity measures, warning that the country faces continuous threats from state and non-state actors. Stay Connected with ProPakistani.

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Taken together, the developments around govt Plans to Turn Eurobond Debt Into Digital Tokens point to a situation that is still moving, and the coming days should bring more clarity.