In an ambitious push to modernise its digital economy and capitalise on excess energy capacity, Pakistan has proposed using 2,000 megawatts (MW) of surplus electricity to power Bitcoin mining and artificial intelligence (AI) data centres. However, this bold move has hit a major obstacle. The International Monetary Fund (IMF) has firmly rejected multiple proposals by Pakistan to subsidise electricity rates for these operations, citing concerns over market distortions, legal ambiguities, and long-term sustainability.
The rejection raises broader questions about the intersection of energy governance, international finance, and emerging technologies. This editorial unpacks the situation, provides a historical timeline, evaluates regional comparisons, and explores what this means for the future of crypto mining in developing nations.
Background: Pakistan’s Bitcoin ambitions
Pakistan’s digital transformation strategy took shape in early 2024 when the Pakistan Crypto Council, with backing from the Ministry of Finance, proposed a national initiative to support crypto mining using idle power infrastructure. Citing the country’s surplus electricity, especially during winters, the government aimed to allocate 2,000 MW to attract global mining operations and position Pakistan as a regional blockchain hub.
In May 2024, the Minister of State for Blockchain and Crypto, Bin Saqib, announced plans for a national Bitcoin reserve, emphasising its role in financial inclusion for Pakistan’s 100 million unbanked citizens. Tax incentives for AI centres and duty exemptions for crypto miners were rolled out in tandem with the energy subsidy plan.
JUST IN: 🇵🇰 IMF rejects Pakistan’s plan to allocate 2,000 megawatts of electricity for Bitcoin mining and Ai data centres.
Pakistan is still committed to pursuing Bitcoin mining plans.
— Bitcoin Archive (@BTC_Archive) July 3, 2025
The IMF’s rejection of Pakistan’s Bitcoin mining: Concerns and consequences
Despite domestic enthusiasm, the IMF rejected the plan in multiple rounds. Initially pitched as a six-month marginal-cost tariff package (Rs 23–24 per kWh), the plan was scaled back to three months under IMF pressure. A revised version in November 2024, offering targeted subsidies, was also denied.
Key IMF concerns included:
- Market Distortion: Subsidised energy for a specific sector could lead to inefficiencies and unfair advantages, distorting market dynamics.
- Power Grid Strain: Crypto mining’s intensive energy demands could overwhelm Pakistan’s already fragile power infrastructure.
- Legal Ambiguity: The IMF questioned the legal status of crypto mining in Pakistan, citing the absence of a comprehensive regulatory framework.
- Transparency Issues: The Pakistani government was criticised for failing to consult the IMF before public announcements, raising doubts about policy coordination.
Dr. Fakhray Alam Irfan, Secretary of Power, acknowledged that the IMF has not given its consent but emphasised that negotiations continue with the World Bank and other institutions to refine the proposal.
Regional comparison: How do other countries handle crypto mining and energy?
To understand the IMF’s position, it’s useful to compare Pakistan’s plan with other regional and global approaches:
| Country | Energy Policy for Crypto Mining | Regulatory Stance | Notes |
| Iran | Subsidised electricity initially | Now banned due to grid overload | Frequent blackouts led to a reversal of incentives |
| Kazakhstan | Taxed and regulated | Legalised but under monitoring | Faced energy shortages from uncontrolled mining growth |
| India | No subsidies | Regulatory uncertainty | RBI remains cautious; no mining-specific support |
| China | Total ban | Illegal | Cited energy and financial stability risks |
| USA (Texas) | Market-based | Legal with environmental debate | Cheap energy in Texas attracted global miners |
Source: Country energy policy for crypto mining regulatory stance notes
Pakistan’s Bitcoin mining The case for responsible innovation
While the IMF’s concerns are valid, critics argue that the outright rejection risks stalling innovation in countries that need it most. Pakistan has a unique opportunity to use digital assets and blockchain to boost financial inclusion, develop digital infrastructure, and attract tech investment.
But to make such a vision viable, Pakistan must:
- Develop a clear legal framework for crypto activities
- Invest in energy infrastructure and theft mitigation
- Build transparent, consultative policy processes
- Balance economic innovation with environmental sustainability
The IMF’s scepticism is not necessarily opposition to crypto, but a call for responsible, sustainable deployment.
A test case for emerging economies
Pakistan’s failed attempt to secure subsidised electricity for crypto mining highlights the challenges facing developing countries at the intersection of energy, innovation, and international finance. The rejection, however, doesn’t spell the end of Pakistan’s crypto ambitions. It signals a need to recalibrate, strengthen institutional dialogue, and align innovation with robust policy frameworks.
As the crypto space continues to evolve, Pakistan may yet become a case study for how emerging economies can responsibly integrate blockchain and digital finance into national development—or how not to.
