The Pakistan Banks Association (PBA), in collaboration with the Centre for Digital Asset Research (CeDAR) at the Lahore University of Management Sciences (LUMS), has convened the Dialogue on Digital Assets and the Future of Banking to examine Pakistan’s approach to digital finance and the role of banks in the emerging virtual asset ecosystem. Held as a continuation of the Pakistan Banking Summit 2026, the event brought together representatives from the Ministry of Finance, Pakistan Virtual Assets Regulatory Authority (PVARA), State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), banking institutions and international financial organisations. Discussions covered cross-border payments, tokenization, programmable payments, regulatory coordination and the practical application of emerging technologies within Pakistan’s financial system. Finance Minister Senator Muhammad Aurangzeb, who attended as chief guest, highlighted the government’s exploration of tokenizing Pakistan’s existing Eurobond debt, subject to the necessary approvals. He said the proposal was under discussion and would require Federal Cabinet approval before the government could proceed with a request for proposals. Tokenization of Naya Pakistan Certificates was also discussed during the event as a potential opportunity. The discussions placed digital representations of financial instruments among the areas being considered for Pakistan’s future financial infrastructure, although these proposals remain subject to regulatory and government decisions.
PVARA Chairman and Minister of State Bilal Bin Saqib called on Pakistan to become an active contributor to the financial infrastructure being developed globally rather than remaining only a user of systems designed elsewhere. He urged banks to support innovators, invest in artificial intelligence capabilities and collaborate with universities such as LUMS to develop local expertise. He also highlighted the potential of supervised, bank-led payment arrangements involving major Gulf remittance corridors, subject to regulatory coordination and safeguards. A related discussion focused on whether banks need to own blockchain infrastructure or can participate through shared systems and partnerships. Bilal Bin Saqib referred to shared infrastructure, custody and Know Your Customer (KYC) frameworks, drawing on a European example involving 35 banks across 15 countries pooling resources. Umar Farooq, J.P. Morgan’s Global Co-Head of Payments, similarly argued that financial institutions do not necessarily need to build their own blockchains, as public infrastructure with appropriate controls could offer a more capital-efficient approach. He highlighted tokenized deposits and explained that banks could provide regulated banking infrastructure to virtual asset businesses, serve them as customers and facilitate the movement of money between traditional finance and digital asset markets without necessarily becoming virtual asset players themselves. The discussion also identified banks’ customer relationships, data, regulated balance sheets and risk management capabilities as important institutional advantages.
Regulatory safeguards, cybersecurity and practical use cases were central to the dialogue. SBP Deputy Governor Saleem Ullah stressed that technology adoption should be driven by meaningful financial applications rather than innovation for its own sake. He identified blockchain-enabled remittances and Roshan Digital Accounts as areas worth exploring through the SBP’s regulatory sandbox, while highlighting the need to assess monetary and financial stability, cybersecurity, anti-money laundering and KYC compliance, and consumer trust. SECP Commissioner Imtiaz Haider called for a value-driven approach to tokenization, urging stakeholders to consider who benefits from converting assets into digital tokens, where regulatory gaps exist and whether Pakistan is ready to adopt particular applications. He emphasised that the central question should be which assets ought to be tokenized to deliver meaningful economic value, rather than simply determining how tokenization can be carried out. Cybersecurity was also highlighted by Farooq, who referred to J.P. Morgan’s experience of processing approximately $12 trillion in daily flows. He outlined three principles for financial institutions: sensitive data should remain within the bank, security should never be outsourced, and cybersecurity must take priority in virtual asset-related activities. SBP Deputy Governor Saleem Ullah also highlighted the institution’s depositor protection record, stating that no depositor had lost a single rupee during 79 years of the central bank’s regulatory oversight. The discussion underlined that new digital finance services will need to maintain comparable standards of security, accountability and trust.
PBA Chairman Zafar Masud called for banks to have a formal role alongside the SBP and PVARA in shaping the emerging regulatory framework. He said banks were seeking clear standards that would allow them to prepare for changes in the financial sector, noting that their infrastructure, compliance capabilities and public trust could help translate innovation into practical services. He also stressed that the banking industry should be involved from the outset as relevant rules are developed. LUMS Vice Chancellor Dr Ali Cheema highlighted the importance of connecting academic research, policymaking and industry practice to assess opportunities, address implementation challenges and develop the capabilities required for digital finance. The event also included a focused industry workshop led by Farooq, bringing together banking technology leaders, regulators and academics to identify priority use cases, potential pilots and implementation considerations. The discussions are expected to contribute to a coordinated banking industry perspective and a potential roadmap for continued engagement with policymakers and regulators. Areas such as tokenized deposits and securities, custody, settlement, cross-border payments and new financial market infrastructure could become part of future discussions. The broader direction emerging from the dialogue is for banks to build on their existing strengths while exploring partnerships and practical applications within an appropriate regulatory and cybersecurity framework.
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