Introduction to Pakistan’s Crypto Mining Plan
Pakistan had plans to use surplus electricity for crypto mining, but the International Monetary Fund (IMF) has rejected a proposal to offer subsidized power to energy-intensive industries, including Bitcoin miners. The country’s Secretary of Power, Fakhre Alam Irfan, told the Senate committee on energy that the IMF claimed such measures could distort the energy market and worsen existing issues in the country’s fragile power sector.
The Proposal and Its Rejection
The Power Division’s November 2024 plan proposed a marginal-cost tariff of 22–23 Pakistani rupees (about $0.08) per kilowatt-hour for industries like copper smelting, data centers, and crypto mining. Officials argued the scheme would boost electricity demand and help absorb surplus capacity. However, the IMF reportedly dismissed the plan, comparing it to sector-specific tax breaks that have historically created economic imbalances in Pakistan.
Concerns and Refining the Plan
The IMF remains concerned that pricing schemes could disrupt the market balance, despite Pakistan having excess electricity, particularly during winter. Irfan noted that the proposal hasn’t been shelved entirely and is under review by the World Bank and other international partners. The government is working on refining the plan with input from these institutions. The IMF’s concerns highlight the need for careful consideration of the potential economic implications of such a plan.
Pakistan’s Digital Transformation Initiative
In May, Pakistan earmarked 2,000 megawatts of surplus electricity for Bitcoin (BTC) mining and AI centers as part of a digital transformation initiative led by the Pakistan Crypto Council and supported by the Ministry of Finance. Finance Minister Muhammad Aurangzeb announced tax incentives for AI centers and duty exemptions for Bitcoin miners to attract investors. This initiative aims to promote the use of surplus energy and drive economic growth through digital technologies.
Using Surplus Energy for Bitcoin Mining
The idea of using surplus energy for Bitcoin mining was first proposed by Saqib at the Crypto Council’s inaugural meeting in March. The meeting included lawmakers, the Bank of Pakistan’s governor, the chairman of Pakistan’s Securities and Exchange Commission, and the federal information technology secretary. This proposal has the potential to provide a new use for surplus energy and contribute to the country’s economic development.
Expanding Bitcoin Holdings
Saqib announced plans for a national Bitcoin reserve during the Bitcoin 2025 conference, revealing that a discussion with Strategy’s Michael Saylor reaffirmed his conviction in the move. The country intends to expand its Bitcoin holdings using yield generated through decentralized finance protocols. This approach could provide a new source of revenue and help Pakistan grow its Bitcoin reserve.
Conclusion
In conclusion, Pakistan’s plan to use surplus electricity for crypto mining has faced a setback due to the IMF’s rejection of the proposal. However, the government is refining the plan and seeking input from international partners. The country’s digital transformation initiative and plans to expand its Bitcoin holdings using DeFi yields demonstrate its commitment to exploring new opportunities in the crypto space. As Pakistan continues to navigate the challenges and opportunities of crypto mining, it is essential to carefully consider the potential economic implications and ensure that any plans are aligned with the country’s overall economic goals.
