Pakistan weighs $2bn tokenization of domestic debt

January 19, 2026 (MLN): Pakistan is planning to tokenize up to $2 billion of domestic debt in an initial phase, primarily targeting retail investors.

The move signals a potential shift toward the use of digital asset infrastructure in sovereign financing and was discussed at the 27th ITCN Asia exhibition held in Lahore.

The proposed move could help widen investor participation and improve liquidity in government securities if backed by an appropriate legal and regulatory framework.

The initiative forms part of broader efforts to facilitate innovation in financial and digital technologies, with policymakers highlighting the importance of creating new opportunities for youth and retail investors in modern financial markets.

Pakistan remains at a nascent stage in regulating crypto and digital assets, but is studying international precedents, including the United Arab Emirates, which has established structured mechanisms for overseeing virtual assets, according to the press release.

Discussions are under way on developing a dedicated framework or authority to better understand and regulate crypto-related activities while managing risks to financial stability and consumer protection.

In the global context, digital assets such as Bitcoin with a capped supply of around 21 million coins were cited as an increasingly relevant part of financial systems worldwide.

It was also noted that crypto and Bitcoin mining activities are already taking place in Pakistan, indicated growing domestic engagement with the sector despite the absence of comprehensive regulation.

The potential tokenization of sovereign debt would mark Pakistan’s first concrete step toward integrating blockchain-based financing into public sector borrowing, though the proposed size would represent only a small fraction of total domestic debt.

The plan is being developed by Pakistan’s Ministry of Finance, which is assessing structure, regulation, and implementation considerations before moving ahead.

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