Govt Eyes Tokenisation of Bonds via Blockchain

ISLAMABAD: Pakistan is likely to link its Naya Pakistan Certificates (NPCs) and sovereign bonds to a regulated blockchain via Digitally Native Notes (DNNs) to enable swift settlement for retail investors, particularly overseas Pakistanis.

A meeting, presided over by Finance Minister Muhammad Aurangzeb with the State Bank of Pakistan (SBP) and the newly created Pakistan Virtual Assets Regulatory Authority (PVARA) on Monday, discussed the tokenisation of sovereign debt instruments and NPCs.

It examined potential structures, implementation pathways, regulatory considerations, and next steps for exploring tokenised sovereign instruments within Pakistan’s evolving financial ecosystem.

A central element of the discussion was the international precedent for sovereign and quasi-sovereign debt tokenisation and how Pakistan can adopt a structure aligned with established global market infrastructure. “It was agreed that PVARA, Ministry of Finance and SBP will continue to coordinate on the design, governance, and phased development of the agenda. Further announcements will follow as the work progresses through the appropriate approvals,” the Ministry of Finance said.

Pakistan plans to issue Naya Pakistan Certificates and sovereign bonds as Digitally Native Notes

The model under consideration, often referred to as a DNN issued through a regulated financial market infrastructure, allows a sovereign bond to be created on a regulated blockchain platform at the moment of issuance, with same-day settlement before integrating with the conventional international clearing and settlement systems that already serve Pakistan’s existing Eurobond programme, added the statement.

The bond’s coupon payments, secondary trading, and final repayment continue through the established global infrastructure, ensuring full interoperability with the institutional investor base that participates in Pakistan’s conventional sovereign issuances.

“The tokenisation of NPCs to potentially enable broader retail participation, improve accessibility for overseas Pakistanis, and create more seamless digital investment rails connected to global markets was also discussed,” the statement said, adding that the session marked one of the first high-level governmental discussions in Pakistan focused specifically on sovereign asset tokenisation and the role blockchain infrastructure can play in modernising capital markets, expanding investor access, and enabling Pakistan to participate in the financial infrastructure of the new economy.

Multilaterals like the Asian Infrastructure Investment Bank and markets like Hong Kong and the Middle East are issuing DNNs to modernise markets and minimise settlement risks.

- Author: Khaleeq Kiani, DAWN