Pakistan must focus on fiscal discipline, export growth and private investment: Fin. Min Aurangzeb

Addressing a Pakistan Banks Association event virtually, the finance minister said Pakistan needed financial innovation that could reduce the cost of doing business and bring more people into the formal economy. He said digital assets should be integrated into the financial system based on their actual economic benefits and their ability to facilitate business activities.

Aurangzeb said Pakistan's transition from economic stability to sustainable growth required fiscal discipline, export expansion and greater private-sector investment. He added that digital innovation should help extend financial services to more people and improve the efficiency of business operations.

The finance minister cited the use of deposit tokens for institutional customers on blockchain networks as a practical example of digital financial innovation. He said Project Agorá of the Bank for International Settlements (BIS) was examining tokenised bank deposits, while the central bank was exploring possibilities for cross-border payments through deposits.

Muhammad Aurangzeb emphasised that banks had an important role in protecting funds and managing risks associated with digital technologies. He said banks were also fundamental to ensuring the effective delivery of services to consumers. He stressed that the regulatory framework must separately consider different types of digital assets and the economic activities associated with them.

The finance minister said a legal framework had been established in Pakistan under the Virtual Assets Act 2026, while the Pakistan Virtual Assets Regulatory Authority (PVARA) was responsible for licensing and supervising virtual asset service providers. He said Pakistan had made progress towards establishing a legal and supervised system for virtual assets.

Aurangzeb highlighted the important roles of the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) in developing the regulatory framework for digital assets. He added that the risks associated with unbacked crypto assets were different, making it necessary for regulators to distinguish between various categories of digital assets and their respective economic activities.

The finance minister further said Pakistan received $41.6 billion in remittances during the last fiscal year, while the figure was expected to exceed $44 billion in the current fiscal year. He stressed that there was no room for negligence in addressing cybersecurity threats alongside the expansion of digital financial systems.