High carbon steel you can check with a magnet once it is hot enough does not stick you can quench in oil to harden. Fitzo is telling you right on good files.
take 2 layers of masking tape and punch or drill hole in it same size as pin. Cover handle material with tape leaving pin material exposed. Finish pin to what you want. I've taken cratex wheels or rod in dremel and polished pin .
.250 is the standard but I have seen 3/16 in some also. 3/16 sounds good for what you want and I would chamfer the hole to not have any sharp edges to fray the cord.
I wish I could invite you all down here for the fun. 100 knifemakers plus 35 tables of supplies for us will be available. Saturday only with a scheduled dinner and get together afterwards at the Courtyard by Marriott Friday night to get to know each other. I am going to enjoy this!
One thing also you can do is I glue one side of sheath and matching welt, when it is almost dry I align them together. I then use a small square faced hammer and hammer with over lapping blows. I then glue other side of sheath and welt then when ready apply them together. I hammer again back...
I start with a 50 grit then 120 then 400 grit pre heat treat on 154cm. AEB-L post heat treat I do 50,120, Trizact A65 then A45 and hand sand. Damascus I do A 30 pre etch. On 154cm after heat treat I do 120, trizact progression again.
I sand with an 80 grit belt then use an edger for the corners. I dampen the leather then rub with saddle soap to smooth , next a hard plastic piece to rub to smooth.