Remittances expected to exceed $44 billion in current fiscal year, Finance Minister

Pakistan needs financial innovation that helps make maximum people part of economy, Muhammad Aurangzeb

Islamabad: Federal Minister for Finance Muhammad Aurangzeb has said that Pakistan is reviewing tokenization of its existing Eurobond debts, consultation is ongoing in this regard. Remittances are expected to exceed $44 billion in current fiscal year.

He expressed these views while virtually addressing ceremony organized by Pakistan Banks Association on topic 'Dialogue on Digital Assets and Future of Banking' on Monday.

Finance Minister said that Pakistan needs such financial innovation that helps reduce cost of doing business and make maximum people part of formal economy. Digital assets also have to prove their utility in financial system through real economic results.

He said that banks will have to make their cyber security system effective and take steps along with State Bank to deal with emerging threats. Roshan Digital Accounts and remittances sector is among important potential uses of tokenization, statistics of first quarter of current fiscal year are encouraging and it is expected that total volume of remittances may increase beyond $44 billion by end of fiscal year.

Finance Minister said that Pakistan is currently moving from economic stability towards sustainable development for which it is necessary to maintain financial discipline, increase exports and promote private investment. Digital innovation can play important role in providing access to financial system to maximum people and providing effective services to business enterprises.

He said that JP Morgan is using deposit tokens for transfer of funds on blockchain networks for institutional customers while Bank for International Settlements BIS's project Project Agora is also reviewing possibilities of improving cross-border payments through tokenized commercial bank deposits and central bank reserves.

Senator Muhammad Aurangzeb said that risks and characteristics of different types of digital assets are different, therefore regulatory procedure for them should also be according to nature of relevant financial activities.

He said that Pakistan has established legal and regulatory framework through Virtual Assets Act 2026 under which Pakistan Virtual Regulatory Authority (PVARA) has been assigned responsibility of issuing licenses to virtual asset service providers and monitoring them. Now to make this framework effective, vigilant monitoring and clear coordination among relevant institutions is necessary.

Finance Minister said that State Bank has provided way to allow provision of banking services to licensed entities from PVARA under specific conditions which include conditions of customer verification and segregating their funds, scope of accounts of entities having NOC is limited while compliance with foreign exchange regulations and other relevant laws is mandatory on banks, banks are not allowed to invest, trade or keep virtual assets with their own funds or customers' deposits, PVARA has made important progress to bring Pakistan out of sanctions and regulatory ambiguity towards legal and supervised system.

He also appreciated role of State Bank of Pakistan and Securities and Exchange Commission of Pakistan in this regard.

Senator Muhammad Aurangzeb said that Pakistan co-hosted dialogue on topic of blockchain and tokenized future on occasion of UN Digital Cooperation Day in New York in September, in which it was emphasized that new technologies fulfill real economic needs and strong security arrangements should also exist with them. Pakistan assuming presidency of G24 will also provide opportunity to include priorities of developing countries of Global South in international policy debate.

He urged leadership of banks to present practical and workable proposals in field of digital assets, invest to create expertise in relevant technologies and move forward permissible activities within their jurisdiction along with regulators.

Finance Minister while calling cyber security most important requirement of digital financial system said that incidents of cyber attacks are increasing around world. Threats exist 24 hours from state and non-state elements. In this situation there is no room for negligence, banks will have to make their cyber security system effective and take steps along with State Bank to deal with emerging threats.

Finance Minister said that 5G spectrum auction in Pakistan, digital payment system like Raast and development of digital infrastructure are important steps for promotion of financial innovation, through these steps help can be taken to improve access and efficiency of financial services.

He while thanking organizers of ceremony, leadership of LUMS, Pakistan Banks Association and representatives of banking sector expressed hope that as result of this dialogue, fruitful proposals will emerge among all relevant parties regarding digital assets and future of banking.