Pakistan’s Energy and Crypto Mining: A Complex Intersection
In a recent development, Pakistan’s ambitious proposal to channel its excess energy into powering the crypto mining industry has hit a roadblock. The International Monetary Fund (IMF) has reportedly turned down this initiative, citing concerns despite the nation’s abundant energy reserves.
Challenges for Pakistan’s Crypto Mining Ambitions
According to a report from Independent Urdu, the IMF has firmly rejected Pakistan’s plan to provide subsidized electricity to certain sectors, including the burgeoning fields of cryptocurrency mining and artificial intelligence (AI). Secretary of Power, Fakhar Alam Irfan, informed the Senate Standing Committee on Energy that any significant energy sector project must be sanctioned by the IMF. The institution expressed apprehension, despite Pakistan’s existing surplus energy capacity.
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Back in November 2024, a proposal was tabled by the Power Division to introduce a marginal cost tariff of PKR 22-23 per kilowatt-hour for industries with high energy demands, such as copper and aluminum smelting, data centers, and crypto mining operations. The Division argued that this move would boost power demand and curtail surplus energy capacity.
Earlier this year, the newly formed Pakistan Crypto Council (PCC) advocated for the utilization of excess energy to bolster crypto mining and AI data centers, particularly in regions with abundant electricity reserves. Spearheaded by PCC CEO and the finance minister’s advisor, Bilal Bin Saqib, this initiative aimed to transform unused electricity into a valuable resource. Nonetheless, the IMF sought urgent clarifications from the finance minister regarding the power allocation strategy.
The IMF reportedly raised concerns that Pakistan’s energy strategy resembles past sector-specific tax incentives, which have historically led to market imbalances. Furthermore, the Senate Standing Committee on Energy expressed dissatisfaction over the absence of the Federal Power Minister during crucial discussions. Several senators voiced alarm over the ongoing issue of “forced” load shedding in areas like Tharparkar, Matiari, and Umerkot, which experience daily power outages lasting up to 14 hours, despite consumers fulfilling their payment obligations.
Envisioning a Future with Digital Assets
Despite the IMF’s stance, Irfan confirmed that the government has not retracted the proposal. It remains in active consultation with international entities such as the World Bank and other development agencies to refine the plan. This initiative aligns with the country’s aspirations to establish itself as a hub for cryptocurrency. In May, the PCC CEO unveiled plans for a national Strategic Bitcoin Reserve, leveraging existing BTC held by the federal government, and announced the launch of a national Bitcoin wallet to manage cryptocurrencies under state custody, reflecting a strong commitment to the evolving digital landscape.
Notably, Saqib has previously commented that the election of pro-crypto US President Donald Trump spurred the government to advance its blockchain and digital assets initiatives, which have remained largely unregulated despite their growing adoption. He stated that Pakistan is “done sitting on the sidelines,” underscoring his vision to propel the nation to the forefront of blockchain-enabled finance.
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