Pakistan's Banks and Regulators Map Out Digital Asset Strategy at PBA-LUMS Dialogue

The Pakistan Banks Association (PBA) and the Centre for Digital Asset Research (CeDAR) at LUMS recently convened a dialogue on digital assets and the future of banking, drawing participation from the Ministry of Finance, the Pakistan Virtual Assets Regulatory Authority (PVARA), the State Bank of Pakistan (SBP), the Securities and Exchange Commission of Pakistan (SECP), and banking industry leaders. The event, a follow-up to the Pakistan Banking Summit 2026, focused on cross-border payments, tokenisation, programmable payments, and the practical application of emerging technologies within Pakistan's financial ecosystem.

Senator Muhammad Aurangzeb, Federal Minister for Finance and Revenue, highlighted the government's exploration of tokenising Pakistan's existing Eurobond debt, subject to necessary approvals. He stressed the importance of collaboration among banks, regulators, and technology practitioners to develop practical digital finance solutions aligned with national economic priorities, supported by strong risk management and cybersecurity safeguards.

Bilal Bin Saqib, Minister of State and Chairman of PVARA, urged Pakistan to help build the new financial infrastructure now taking shape. He noted that Pakistan was largely a user of systems designed elsewhere when correspondent banking and major payment networks were being established, and asked whether the country wants to keep renting its future or help build and own it. He called on banks to become launchpads for innovators, invest in AI capabilities, and strengthen collaboration with universities such as LUMS. He also identified supervised, bank-led payment arrangements involving major Gulf remittance corridors as an opportunity worthy of examination.

Saleem Ullah, Deputy Governor of SBP, emphasised prioritising practical use cases over technology itself, pointing to blockchain-enabled remittances and Roshan Digital Accounts as areas worth exploring in the regulatory sandbox. He underscored the need to assess and mitigate risks, including monetary and financial stability, cybersecurity, AML/KYC compliance, and consumer trust, and encouraged banks to test relevant solutions through SBP's sandbox.

Imtiaz Haider, Commissioner at SECP, stressed a clear, value-driven approach to tokenisation. He urged stakeholders to assess who stands to benefit, identify regulatory gaps, and evaluate Pakistan's readiness to adopt emerging technologies, noting that the fundamental question is not how assets can be tokenised but which assets should be tokenised to deliver meaningful economic value.

Zafar Masud, Chairman of PBA, stated that banks are not asking to be protected from change but are seeking clear regulatory standards to build towards. He emphasised that banks must be formally engaged from the outset as the ultimate delivery channel, bringing infrastructure, compliance capabilities, and public trust to translate innovation into practical financial solutions. The dialogue also included an industry workshop led by Umar Farooq of J.P. Morgan, bringing together banking technology leaders, regulators, and academia to identify priority use cases and potential pilots.

The discussions are expected to help shape a coordinated banking industry perspective and a potential roadmap for continued engagement with policymakers and regulators, supporting Pakistan's transition towards a responsible, innovative, and future-ready financial ecosystem.