Pakistan is advancing toward a regulated framework for virtual assets as the government explores the potential applications of blockchain and tokenization across key areas of the economy, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said. Speaking at the opening session of the United Nations Digital Cooperation Day 2026 event, “Blockchain and the Tokenized Future: Sovereign Choices and Safeguards for Next-Gen DPI,” the finance minister highlighted the government’s focus on developing a regulatory approach for virtual assets while ensuring that emerging technologies address practical economic requirements. Aurangzeb said tokenization should be directed toward areas such as reducing remittance costs, improving access to financing for small and medium-sized enterprises (SMEs), supporting sovereign debt markets, and expanding financial inclusion. His comments come as Pakistan has already established the Pakistan Virtual Assets Regulatory Authority (PVARA) under the Virtual Assets Act 2026, creating a dedicated institutional framework for licensing and supervising virtual asset service providers.
The finance minister emphasized that blockchain and tokenization should be connected to real economic needs rather than being pursued solely as technological developments. Lower-cost remittances were identified as one potential area where tokenization and related digital infrastructure could have an economic impact, particularly given the importance of overseas Pakistani transfers to the country’s external finances. The government also sees potential applications in SME financing, where digital technologies could contribute to improving access to financial services for smaller businesses. Tokenization could also have applications in sovereign debt markets and broader financial inclusion, potentially creating new mechanisms for accessing and transferring financial assets. The emphasis on practical applications indicates that the government’s approach is focused on linking digital-asset technologies with specific financial and economic use cases.
Aurangzeb also stressed that private-sector innovation needs to be accompanied by state safeguards, inclusive digital infrastructure, and greater international cooperation. The development of a regulated virtual-assets market requires rules covering areas such as licensing, consumer and investor protection, market integrity, and measures against money laundering and other illicit financial activity. Pakistan’s Virtual Assets Act 2026 provides the legal basis for PVARA to license, regulate, and supervise virtual asset service providers and issuers operating in or from Pakistan. PVARA’s regulatory process has included consultation on licensing regulations and activity-specific requirements covering areas including exchanges, custody, broker-dealer services, advisory, lending and borrowing, derivatives, asset management, transfer and settlement, issuance, and mining-related services.
The development marks a further step in Pakistan’s transition toward an operational regulatory framework for virtual assets. PVARA has already notified licensing regulations and opened the licensing process for virtual asset service providers, with requirements covering conduct, prudential standards, technology, and anti-money laundering and counter-terrorism financing controls. The framework also provides for licensed providers to gain access to the formal banking system under applicable State Bank of Pakistan rules. The government’s latest comments indicate that blockchain and tokenization are being considered within a wider digital-finance strategy, with potential applications extending from remittances and SME financing to sovereign debt and financial inclusion. At the same time, the emphasis on safeguards and international cooperation highlights the regulatory considerations accompanying the development of Pakistan’s virtual-assets sector.
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