TLDR
IMF blocks Pakistan’s 2,000MW crypto mining plan, citing opposition to targeted energy subsidies.
Pakistan’s Bitcoin Strategic Reserve plan faces delays, now under review by the World Bank.
IMF warns Bitcoin mining subsidies may raise tariffs and strain Pakistan’s power grid.
Pakistan’s PDAA launched to regulate crypto; national reserve plan still lacks updated status.
The International Monetary Fund (IMF) has raised objections to Pakistan’s plan to use subsidized electricity for Bitcoin mining. The development has introduced uncertainty around the country’s broader goal of establishing a national Bitcoin reserve.
Pakistan’s government had announced earlier this year that it would create a government-led Bitcoin Strategic Reserve to support digital infrastructure and attract investment.
IMF Rejects Subsidized Electricity for Crypto Mining in Pakistan
Pakistan’s proposal to allocate 2,000 megawatts of electricity to cryptocurrency mining and artificial intelligence data centers has been blocked by the IMF.
According to Power Secretary Dr. Fakhray Alam Irfan, the IMF is not in favor of any targeted subsidies, including those for digital mining operations.
“The IMF is firmly against such subsidies,” said Dr. Irfan during a media briefing. He stated that the plan was not shared with the IMF in advance, which may have contributed to the opposition. The subsidized power was intended to utilize surplus electricity during winter months, a time when demand falls in many parts of the country.
Plan Now Under Review by Other Financial Bodies
With the IMF withholding its support, the government has submitted the proposal to the World Bank and other lenders for review. These bodies are assessing whether the power allocation for mining activities aligns with broader economic and environmental guidelines.
Pakistan had hoped that allocating excess electricity to Bitcoin mining would bring foreign investment and technical development. However, these new reviews may delay or alter the initiative, depending on how the evaluations proceed. There has been no official response from the World Bank at the time of publication.
Aiming to Become a Digital Hub
The Pakistan Crypto Council (PCC), which is backed by the government, has been at the center of the reserve plan. It says the country has the geographic advantage to serve as a digital bridge between Asia, Europe, and the Middle East. The initiative includes both mining facilities and AI data centers, and was planned as part of a broader digital strategy.
Bilal Bin Saqib, head of the PCC, previously stated, “Today is a very historic day. The Pakistani government is setting up its own government-led Bitcoin Strategic Reserve.” He added that the idea was inspired by developments in the United States and other leading economies that are exploring crypto-based reserves.
Earlier this year, Pakistan launched the Pakistan Digital Assets Authority (PDAA), a regulatory body to oversee crypto-related compliance. This move was seen as a major step towards formalizing the crypto economy in the country.
Power Supply Concerns and Political Reactions
The IMF has warned that allocating such large-scale power to mining could affect national power tariffs. It also raised concerns about the potential strain on the power grid, especially if future demand grows beyond forecasts. The IMF further noted that Pakistan should have consulted with lending institutions before announcing major policy changes.
Meanwhile, lawmakers are debating recent issues around the power sector. A Rs 1.275 trillion circular debt settlement with local banks came under scrutiny, with some senators claiming pressure was applied during negotiations. Power Secretary Dr. Irfan denied these allegations and said that no new levies had been introduced as part of the settlement.
The government also pointed to the success of the Apna Meter Apni Reading mobile application, which has reportedly been downloaded by over 500,000 users. The app allows consumers to submit their own electricity readings and is expected to launch soon for K-Electric users as well.
The Pakistan government has not issued an updated statement on the status of the Bitcoin reserve plan since the IMF’s rejection.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
