High-stakes gamble: Pakistan's mining plan faces IMF scrutiny

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In a bold move to position itself as a global hub for digital finance, Pakistan announced an ambitious plan to allocate 2,000 megawatts (MW) of electricity for block reward mining and artificial intelligence (AI) data centers, unveiled at the BTC Vegas 2025 conference on May 29.
Spearheaded by Bilal Bin Saqib, CEO of the newly formed Pakistan Crypto Council and Special Assistant to the Prime Minister for Crypto and Blockchain, the initiative aims to leverage surplus energy to attract crypto miners, blockchain companies, and AI firms. However, the plan has drawn sharp scrutiny from the International Monetary Fund (IMF), which is questioning its legality, sustainability, and impact on Pakistan's strained energy grid amid ongoing financial negotiations. This clash highlights the tension between Pakistan's crypto ambitions and economic realities, making it a critical test case for balancing innovation with stability.
The announcement, made in Las Vegas and attended by high-profile figures like United States Vice President JD Vance and President Donald Trump's son, Eric, positions Pakistan as a pioneer among developing nations embracing decentralized finance (DeFi). The plan involves repurposing three underutilized coal-powered plants, operating at just 15% capacity, to power Bitcoin mining and AI operations. Saqib framed the initiative as a strategic use of PakPakistan'sergy surplus, which stems from heavy infrastructure investments and reduced industrial activity.
The government also introduced a national Bitcoin wallet to hold seized digital assets as a 'sovereign reserve,' signaling long-term confidence in crypto without using taxpayer funds. This 'no taxpayer-funds' model, inspired by the U.S.'s proposed Bitcoin reserve, aims to collect miner fees and global donations to build the reserve, making it politically palatable amid fiscal scrutiny.
Pakistan's energy paradox—excess generation capacity paired with high electricity prices and frequent outages—lies at the heart of the initiative. The country's industrial electricity rates, ranging from Rs. 38.80 to Rs. 40.26 per kWh (about $0.14–$0.15), are significantly higher than those in mining hubs like Texas, where rates can drop to $0.012 per kWh during off-peak hours. To make the plan viable, Pakistan is offering subsidized rates of around $0.09 per kWh for miners, aligning with rates for export industries. This subsidy, however, has sparked criticism from economists who question why crypto miners receive preferential treatment over households and industries paying up to $0.22 per kWh.
With 55% electricity price hikes since 2021 fueling social unrest, the move risks exacerbating public discontent in cities like Karachi and Lahore, where outages often exceed 12 hours daily. The IMF's response has been swift and pointed. On June 1, the Fund demanded 'urgent clarification' from Pakistan's Finance Ministry, scheduling a dedicated virtual meeting to address the plan's legality and energy implications. Pakistan, reliant on a $2.1 billion IMF bailout package, faces tough negotiations as the IMF emphasizes fiscal discipline and sustainable resource management. The Fund's concerns center on the strain BTC mining could place on Pakistan's grid, given its energy-intensive nature—global BTC mining consumes an estimated 138 terawatt-hours annually.
Critics, including the IMF, argue that diverting 2,000 MW to mining could worsen outages, undermine economic stability, and conflict with Pakistan's commitments under its IMF program. Experts like Daniel Batten, cited on X, counter that mining can monetize excess renewable energy, as seen in Bhutan and El Salvador. However, Pakistan's reliance on coal plants undercuts this argument.
Pakistan's 'crypto' push also faces regulatory hurdles. Digital currency remains illegal for domestic use under current laws, contradicting the government's global pitch for 'crypto' investment. The Financial Action Task Force (FATF), which has repeatedly placed Pakistan on its grey list for money laundering risks, adds further complexity. The IMF's scrutiny reflects fears that uncoordinated crypto policies could destabilize Pakistan's financial reforms, especially without a clear regulatory framework. Saqib's vision of Pakistan as a 'digital bridge' between Asia, Europe, and the Middle East hinges on attracting international capital, but high energy costs and fragile infrastructure—described as a 'delicate balancing act' by analysts—threaten its feasibility.
Despite these challenges, the plan has potential upsides. Pakistan's young, tech-savvy population, with over 40 million digital asset wallets and an average age of 23, offers a strong foundation for digital innovation. Low labor costs and untapped renewable energy potential (currently only 7% of the power mix) could make Pakistan a future mining hub if infrastructure improves. The initiative could also drive economic growth by creating tech jobs and attracting foreign investment, as Saqib emphasized at BTC Vegas 2025. However, without addressing energy reliability, regulatory clarity, and IMF concerns, Pakistan risks a diplomatic and economic 'power outage.'
As Pakistan navigates this high-stakes gamble, the outcome will reverberate globally. Success could inspire other developing nations to embrace crypto mining, while failure could reinforce the IMF's cautionary stance on digital assets. For now, Pakistan's bold vision hangs in the balance, caught between innovation and economic reality.
Watch: Bitcoin mining in 2025: Is it still worth it?
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