By Azam Tariq

Pakistan’s exploration of blockchain-based sovereign bonds could diversify the country’s debt financing channels, attract a broader pool of investors and modernise capital-market infrastructure, provided the initiative is supported by a robust regulatory framework, strong investor protections and secure digital systems, experts say.

Pakistan is focusing on potential structures, implementation pathways, regulatory requirements and pilot models for tokenised sovereign instruments. Among the options under consideration is the Digitally Native Note (DNN), a sovereign bond issued on a regulated blockchain platform with same-day settlement before integration with conventional international clearing systems.

The proposal also aims to build on Pakistan’s growing diaspora investment base as the Roshan Digital Account programme has attracted nearly $13 billion in cumulative inflows from overseas Pakistanis and international investors since its launch in 2020.

Speaking to Wealth Pakistan, Muhammad Faisal Khan, Founder of Eco-Neighbor, a civic utility token on the Solana blockchain that rewards verified community action in Karachi, said blockchain-based bonds could significantly broaden Pakistan’s investor base.

He noted that the success of the Roshan Digital Account demonstrates strong interest among overseas Pakistanis when investment channels are accessible and convenient.

“Tokenised bonds could take this a step further by allowing fractional ownership, enabling smaller investors to participate with modest investments rather than purchasing a full bond unit,” he said.

According to Faisal, the model could appeal to three key investor groups: domestic retail investors, overseas Pakistanis and institutional investors seeking regulated exposure to sovereign assets through digital capital markets.

However, he emphasized that regulatory safeguards must be in place before any issuance can proceed.

“Pakistan needs clearly defined jurisdictional roles for PVARA, the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) before launching any pilot programme,” he said.

Faisal also called for mandatory smart-contract audits, institutional-grade custody arrangements, secure key management systems, disaster recovery protocols and comprehensive investor protection mechanisms.

“If an overseas Pakistani investor experiences a technical failure, the legal remedy must be clear and enforceable,” he added.

He further stressed that any DNN structure should be thoroughly tested for compatibility with international clearing systems such as Euroclear and Clearstream, as Pakistan’s existing Eurobond programme relies on these platforms.

Similarly, Wajid Awan, Listing Manager at LBank, a global cryptocurrency exchange, told Wealth Pakistan that blockchain-based sovereign bonds could help Pakistan access a wider and more diversified investor base.

He said decentralised finance mechanisms can streamline certain operational processes, but sovereign debt instruments must continue to operate within a regulated framework to maintain investor confidence, transparency and market discipline.

Credit: INP-WealthPk