Pakistan and the Digital Race: Public Digital Infrastructure, Virtual Assets and a Vision for Sustainable Growth

Against the backdrop of the United Nations General Assembly's high-level debate in New York, Pakistan's Finance Minister, Muhammad Aurangzeb, attended the Ministerial Dialogue of the Digital Cooperation Organisation (DCO). This was not a ceremonial diplomatic appearance. The fact that a country still grappling with public debt and inflation sent its finance minister to a forum focused on the digital economy signals a shift in how Pakistan is redefining its own development path. For decades, Pakistan's economic story has usually been told through the numbers of crisis: IMF negotiation rounds, budget deficits, and repeated currency devaluations. But in New York this time, the message Aurangzeb carried revolved around a different axis: digital transformation, public digital infrastructure, and virtual-asset governance. This can be seen as a relatively clear turning point, as Islamabad places digital technology at the centre of its growth strategy rather than treating it as a secondary sector. From economic stabilisation to sustainable growth The most important point in the Finance Minister's remarks is how he positions the current phase of the economy. According to Aurangzeb, Pakistan is moving from a phase of economic stabilisation towards sustainable growth. This is a deliberate communications claim, implying that the hardest part of macroeconomic adjustment is over and that the focus will now be on building foundations for long-term development. In macroeconomics, the boundary between "stabilisation" and "sustainable growth" is rarely clear. Stabilisation usually means controlling inflation, narrowing deficits and restoring market confidence. Sustainable growth, by contrast, requires long-term investment in productivity, infrastructure and institutions. Pakistan's self-declaration that it has entered the second phase is an important political signal, but it also sets high expectations: if growth does not materialise, this message will quickly become a weakness in public debate. The central tool Aurangzeb has chosen for the new phase is digital technology. This is no random choice. In an economy where most transactions are still cash-based and a large share of the population lacks full digital identity, building digital infrastructure is seen as a prerequisite for expanding credit, widening financial services, and narrowing the gap between the formal and informal economy. Public digital infrastructure: the pillar of the strategy Public digital infrastructure (DPI) is the central concept in Pakistan's strategy. Put simply, DPI is a set of shared digital systems - such as digital identity, interoperable payment systems and public data platforms - that underpin both the public and private sectors. Rather than each ministry building its own system, DPI allows services to be connected on a common platform. According to Aurangzeb, promoting public digital infrastructure and cashless payments is a top priority. This reflects a reality proven in many developing countries: when digital payments become widespread, transaction costs fall, money flows become more transparent, and access to credit for households and small businesses expands significantly. In India, for example, the Aadhaar system together with the UPI payment platform created a digital-finance revolution over more than a decade, turning hundreds of millions of previously unbanked users into active participants in the digital economy. Pakistan is clearly watching that model with the ambition to replicate part of its success, though its institutional and technical conditions are not identical. Cashless payments also carry political meaning. When money flows become more transparent, the government gains additional tools to combat tax leakage, reduce grassroots corruption, and curb the shadow economy - a problem long embedded in Pakistan's economic structure. Yet this is also a sensitive point, because digitalisation cannot immediately eliminate long-standing informal relationships. Virtual-asset governance: the line between opportunity and risk One of the most notable contents in Aurangzeb's remarks is the subject of virtual assets. He referred to Pakistan's need for a legal framework, oversight mechanisms and a licensing system for this field. This is a relatively pragmatic stance, rather than an outright ban or letting the market operate uncontrolled. For years, crypto and virtual assets existed in Pakistan in a legal grey zone. Transactions occurred but without user protection, mechanisms to handle fraud, or ways for the state to monitor money flows. Moving towards building a legal framework, as presented by the Finance Minister, is a way for Pakistan to confront an already-existing reality rather than continue denying it. However, this is an area where the line between opportunity and risk is thin. Virtual assets can open new fundraising channels for tech firms, enable faster and cheaper cross-border payments, and attract capital from overseas Pakistani communities. But they are also tied to the risks of money laundering, illicit financing, and price volatility that harms uninformed retail investors. Strikingly, Pakistan places virtual assets within a larger picture tied to remittances and tokenised assets. This is not a purely crypto-speculation approach, but an approach to digital financial infrastructure, where virtual assets are seen as a tool within the broader ecosystem of the digital economy. Remittances and asset tokenisation: an unexploited angle Pakistan is one of the world's largest remittance-receiving countries. Money flows from overseas workers play an important role in balancing the payment account and stabilising the exchange rate. In that context, optimising remittance channels with digital technology becomes a priority with both economic and social significance. When Aurangzeb mentions tokenisation - including public debt and real estate - he touches on a technically intricate subject with the potential to reshape capital-market structure. Tokenisation allows traditional assets to be fractionalised, traded faster, and made accessible to a broader investor base. For a country whose capital market is still thin and illiquid, this could be a direction worth considering. Still, a cautious view is needed. Tokenisation does not create value by itself; it is merely a way of representing ownership rights. Real value still depends on the quality of the underlying asset, the legal framework protecting investors, and the operational capacity of the payment system. If those foundations are not ready, asset tokenisation may only add a new technological shell over old problems. DCO cooperation: a strategy of multilateralisation An important aspect of the Finance Minister's trip is participation in the Ministerial Dialogue of the Digital Cooperation Organisation (DCO). This is a multilateral body bringing together countries cooperating on digital-economy policy. Pakistan's participation in this framework shows it is seeking to learn from and cooperate with other similarly oriented countries. The DCO is a place where member states can share experience on building digital infrastructure, data governance, and digital-economy development. For a country at an early stage of digital transformation, joining such a cooperation platform can shorten the learning curve, avoid costly mistakes, and access technical resources. Beyond the DCO, Aurangzeb's presence at the UNGA also carries diplomatic meaning. As Pakistan seeks to strengthen ties with international partners and support for economic reform programmes, placing digital transformation at the centre of its foreign-policy message is a way to position the country as a modern partner, ready to join a technology-driven global economy. Challenges ahead Despite the positive messaging, Pakistan's digital transformation path still faces many obstacles. First, the country's technical infrastructure is uneven across regions. While major cities like Karachi, Lahore and Islamabad have relatively good internet connectivity, many rural areas remain left behind. A public digital infrastructure only truly matters when it reaches the entire population, not just the urban middle class. Second, public trust in digital systems remains limited. With lingering concerns over data security and privacy, users may hesitate to shift to digital services. Building trust is a long process, requiring both a robust legal framework and operational transparency. Third, institutional capacity to manage a digital economy - from virtual-asset licensing to money-flow oversight - has not kept pace with the speed of technology. Building an effective management apparatus requires investment in people, not only in technology. This may be the biggest and most time-consuming challenge. Fourth, digital transformation cannot take place in an unstable macroeconomic environment. If inflation is high, the exchange rate volatile and foreign investment cautious, businesses will struggle to expand investment in technology-based business models. Economic stability and digital transformation are therefore inseparable processes. Another way of looking at Pakistan's story It is notable that the way Pakistan's Finance Minister frames his country's story differs from how many other developing countries usually present it. Instead of telling a story of overcoming crisis through international bailouts, he emphasises building an internal foundation for long-term growth. Against a backdrop where globalisation is challenged by protectionism and geopolitical competition, digital transformation to become part of a technology-driven global value chain is a rational strategy for countries with limited resources. Pakistan, with a young population and a potential digital workforce, could leverage this advantage if it builds the right environment. Digital transformation also carries important social implications. When financial services become more accessible, the gap between women and men in accessing credit can narrow. When digital payments become widespread, small businesses in remote areas can join a larger market. These are benefits not yet fully quantified, but they matter greatly for a country with high inequality. Yet caution is needed against grand promises about technology. Many countries have declared that digitalisation will solve every problem, only to realise that technology is a tool, not a solution in itself. The success of digital transformation depends on combining technology with institutional reform, human-capacity building, and the construction of social trust. What Pakistan is presenting in New York is a vision. That vision may be reasonable in concept, but the gap between vision and execution remains vast. Building a digital identity system for hundreds of millions of people, establishing a virtual-asset regulatory framework, and creating interoperable payment infrastructure will require years of sustained effort, not just a few high-level meetings. A contrarian view: could digitalisation become a new trap? A less optimistic view argues that focusing on digital transformation may be a way to avoid deeper structural problems in Pakistan's economy. Tax reform, restructuring state-owned enterprises, improving the investment climate - these are harder issues but ones with more direct and rapid effects on growth. Digital transformation, meanwhile, is a long-term programme that may absorb significant resources without guaranteed results within a few years. Moreover, digitalisation can create new risks. As data becomes a key asset, questions of ownership, privacy and control become urgent. A strong digital identity system can be abused for surveillance, or exploited for improper purposes. Countries ahead in this field have faced similar controversies, and Pakistan will likely confront them too. In the virtual-asset sphere, the boundary between reasonable regulation and obstructing innovation is hard to define. If licensing is too strict, tech firms may leave the market; if too loose, users bear the risk. Finding the balance will be a difficult task for policymakers. And there is a systemic issue. Digital transformation requires coordination across many ministries, between central and local government, and between the public and private sectors. Where governance systems remain fragmented, this coordination may become one of the greatest obstacles, even when financial resources are adequate. What Pakistan is seeking is not just technology. It is a new development model, where economic opportunities are distributed more widely, where transparency gradually replaces uncertainty, and where public trust is rebuilt after years of instability. That is a worthwhile goal, but also one hard to achieve without accompanying and coordinated reforms. Towards a digital future shaped by people The message Pakistan's Finance Minister brought to New York shows a pragmatic approach: choosing technology as a lever for growth, while acknowledging the need for a legal framework and multilateral cooperation. This is a rational direction, but nothing guarantees it will succeed. The biggest open question remains: can a country "leapfrog" into a digital economy without solving its foundational structural problems? The experience of countries that went before suggests the answer is unclear. There are examples of success, but also many failures when technology was over-expected. What is certain is that over the coming years, how Pakistan implements its commitments on public digital infrastructure, virtual-asset governance and asset tokenisation will reshape how the world views this economy. If concrete steps translate into real results, Pakistan's story could become a reference model for other developing countries. If it stays only at the level of declarations, it will become another example of the gap between expectation and execution. For readers following the global economy, this is a story worth tracking. Not because of what Pakistan promises today, but because what it does in the next 24 months will show whether a developing economy can truly redefine itself through digital technology, or whether digitalisation is merely a form of surface modernisation that does not touch its deepest problems. The answer remains open, and it is precisely that openness that makes this story worth continued attention.