Main Points:
- Bilal Bin Saqib’s meeting with Bo Hines, Executive Director of President Trump’s Council on Digital Assets, at the White House.
- Announcement and vision behind Pakistan’s Strategic Bitcoin Reserve (SBR).
- Allocation of 2,000 megawatts of surplus electricity to Bitcoin mining and AI data centers.
- Creation of the Pakistan Digital Assets Authority (PDAA) to regulate blockchain-based financial infrastructure.
- Criticism and concerns from the International Monetary Fund (IMF) regarding energy usage and fiscal transparency.
- Pakistan’s aspiration to become a leader in digital asset adoption in the Global South.
- Global context: comparison with other countries exploring Bitcoin reserves and national digital asset strategies.
Introduction
In late May and early June 2025, Pakistan aggressively asserted itself on the world stage of digital asset policy by launching what it calls a Strategic Bitcoin Reserve (SBR) and seeking closer cooperation with the United States through a high-profile meeting at the White House. Bilal Bin Saqib, Pakistan’s Minister of State for Crypto and Blockchain and CEO of the Pakistan Crypto Council (PCC), traveled to Washington, D.C., where he met with Robert “Bo” Hines, the Executive Director of President Donald Trump’s Council on Digital Assets. Their discussions covered a wide range of topics, from forging bilateral partnerships to laying the groundwork for decentralized finance initiatives. It is Pakistan’s ambition that this SBR will not only provide a long-term store of value denominated in Bitcoin but also signal to global investors that Pakistan is committed to modernizing its economy through blockchain and digital asset innovation.
Simultaneously, Pakistan announced plans to allocate 2,000 megawatts of surplus electricity—power that would otherwise remain unused—for Bitcoin mining and to support AI data centers. By doing so, the government hopes to convert idle energy resources into digital production capacity, generate new employment opportunities, and extend the reach of national infrastructure. In parallel, Islamabad established the Pakistan Digital Assets Authority (PDAA) to oversee licensing and regulation for exchanges, custodial services, wallets, tokenization platforms, stablecoins, and decentralized finance applications. This multifaceted agenda reflects an effort to build a comprehensive regulatory and infrastructural framework that positions Pakistan as a pioneer in digital asset adoption in South Asia.
However, the International Monetary Fund (IMF) has voiced concerns about whether dedicating vast amounts of electricity to Bitcoin mining is prudent given Pakistan’s persistent power shortages and ongoing negotiations with the IMF over financial support. Critics within Pakistan’s financial establishment argue that cryptocurrency remains banned under existing law, creating an apparent contradiction between Islamabad’s new digital asset strategy and its domestic regulatory environment. This article unpacks these developments, situates Pakistan’s strategy within a broader global context, and examines the implications for investors and blockchain practitioners looking for new digital asset opportunities.
1. Bilal Bin Saqib’s White House Visit
On June 3, 2025, Bilal Bin Saqib, appointed as Pakistan’s Special Assistant to the Prime Minister on Blockchain and Cryptocurrency with the rank of Minister of State, visited the White House to meet Robert “Bo” Hines, who President Trump appointed earlier in January 2025 as Executive Director of the Council on Digital Assets. The meeting was part of an effort by Pakistan to strengthen ties with key U.S. policymakers in the rapidly evolving digital asset space. According to reports from Cointelegraph and Dawn, the two leaders exchanged views on deepening bilateral cooperation, exploring potential public-private partnerships, and charting a path for decentralized finance initiatives that could benefit both countries.
During the discussion, Saqib emphasized Pakistan’s goal of positioning itself as a digital asset leader in the Global South, stating, “It is my mission to position Pakistan as a global leader in digital assets.” He explained that the SBR represents Pakistan’s long-term commitment to Bitcoin as a store of value, and he invited U.S. counterparts to explore joint ventures in crypto mining and blockchain governance. Bo Hines, for his part, reaffirmed that the Trump administration is keen on fostering international collaboration to promote innovation and secure U.S. leadership in digital asset policy. Both sides reportedly discussed pathways to facilitate cross-border transactions, harmonize regulatory standards, and build infrastructure for DeFi projects aimed at widening financial inclusion.
In addition to meeting Hines, Saqib held talks with officials from the White House Counsel’s Office to exchange perspectives on the legal and regulatory frameworks needed for sound blockchain governance. Pakistan conveyed its intention to develop a comprehensive statutory regime for digital assets, aligned with global best practices. In turn, U.S. legal advisors offered insights on how various states have approached stablecoin regulation, custody requirements, and anti–money laundering (AML) controls. This exchange signals Islamabad’s awareness that adopting an innovative stance on digital assets must be coupled with clear legal parameters to build investor confidence and ensure compliance with international norms.
2. Strategic Bitcoin Reserve: Vision and Implementation
2.1 Genesis of the Strategic Bitcoin Reserve
Pakistan officially unveiled its Strategic Bitcoin Reserve (SBR) at the Bitcoin 2025 Conference held in Las Vegas on May 28, 2025. At the conference, Saqib, acting as head of the Pakistan Crypto Council, announced that the government will establish a national Bitcoin wallet dedicated to long-term holding, with no immediate plans to liquidate the holdings. By designating Bitcoin as part of its sovereign asset portfolio, Pakistan aims to diversify away from traditional reserves and hedge against currency devaluation. This move places Pakistan among a small group of countries—led by El Salvador in 2021—that has incorporated Bitcoin into its national reserves.
In his statement at the conference, Saqib declared, “From launching our Strategic Bitcoin Reserve to unlocking national infrastructure for crypto mining and AI data zones, Pakistan is building a real framework for digital asset adoption and economic modernization.” He argued that holding Bitcoin provides a natural hedge against inflation and currency volatility in emerging markets. Moreover, by communicating that these Bitcoin holdings are intended to be kept indefinitely, Pakistan hopes to signal credibility to global investors that the SBR is not a speculative endeavor but rather a strategic, long-term store of value.
2.2 Financial Rationale and Potential Returns
Given Pakistan’s history of persistent current account deficits and inflationary pressures on the Pakistani rupee (PKR), the government believes that Bitcoin—a scarce digital asset with a fixed issuance schedule—could serve as a partial hedge. While Bitcoin’s price history has been marked by volatility, over the medium to long term it has shown significant appreciation relative to fiat currencies in inflationary environments. If Bitcoin’s growth trajectory continues, the SBR could appreciate substantially, providing Pakistan with windfall gains that could be deployed for infrastructure projects, debt servicing, or social programs.
For example, if Pakistan allocated an initial $100 million of Bitcoin at an equivalent price of $60 000 per BTC in May 2025, that would equate to roughly 1 666.67 BTC. Should Bitcoin reach $100 000 by 2027—a not-uncommon projection among leading analysts—Pakistan’s holdings would be worth approximately $166.7 million, yielding a 66.7 percent return on investment. While this scenario assumes no selling pressure and continued strong demand, it illustrates why Islamabad is willing to experiment with Bitcoin as part of its reserve management strategy.
2.3 Technical Infrastructure: Custody and Security
Creating a sovereign Bitcoin reserve requires robust custodial arrangements and strong security controls. According to the PCC, Pakistan is in discussions with global custodian partners to deploy an institutional-grade, multi-signature (multisig) wallet solution. Multisig wallets require multiple private keys—held by separate, secure entities—to approve any withdrawal, thereby mitigating the risk of a single point of failure. Islamabad is also exploring hardware security modules (HSMs) and cold storage solutions to protect against cyber threats and unauthorized access.
Furthermore, Pakistan intends to publish an annual audit report of its Bitcoin holdings, working with a leading professional services firm to attest to the existence and integrity of the reserve. By embracing best-in-class security protocols and third-party attestations, Pakistan aims to dispel concerns of misappropriation, instill confidence among citizens, and attract global institutional investors seeking transparency.
3. Power Allocation for Crypto Mining and AI
3.1 Harnessing Surplus Electricity
One of the key pillars of Pakistan’s digital asset strategy is the allocation of 2 000 megawatts (MW) of surplus electricity to Bitcoin mining and the development of AI data centers. Pakistan has historically faced chronic power shortages; yet, nightly load-shedding often leads to excess generation capacity during off-peak hours. By redirecting this unused capacity toward Bitcoin mining, the government aims to convert idle energy into a revenue-generating activity and simultaneously spur ancillary industries, such as data center construction and maintenance.
Pakistan’s Power Division has identified several underutilized power plants—particularly hydropower facilities—that can run at low capacity without jeopardizing system stability. By signing power purchase agreements (PPAs) with designated mining operators, the government guarantees a fixed tariff for energy consumed by crypto miners. This arrangement not only provides predictable costs for mining firms but also creates a reliable revenue stream for state-owned power utilities. Local mining operators have expressed interest in building facilities near hydropower dams in northern Pakistan, where cooler climates improve mining efficiency and reduce operational costs related to heat dissipation.
3.2 Synergy with AI Data Centers
In addition to Bitcoin mining, Pakistan plans to use part of this 2 000 MW allocation to power artificial intelligence (AI) data centers. The rationale is twofold: first, AI workloads—such as machine learning model training, inference, and data analytics—require high-performance computing (HPC) resources that can consume significant power; second, colocating AI data centers with mining rigs allows operators to dynamically allocate energy between Bitcoin hash computations and AI processes, depending on market conditions and computational demand. For instance, during periods of low AI workload usage, mining operations can ramp up to utilize unused processing capacity, and vice versa.
By fostering this synergy, Pakistan’s strategy aims to foster a local ecosystem of technology firms that specialize in edge computing, GPU farming, and distributed AI research. Universities and research institutes in Karachi and Lahore have already expressed interest in partnering with the government to pilot AI initiatives focused on agriculture, natural resource management, and healthcare diagnostics. The expectation is that the influx of foreign investment in both mining and AI infrastructure will generate high-skilled jobs, reduce brain drain, and stimulate innovation clusters in metropolitan areas.
4. Regulatory Developments: Pakistan Digital Assets Authority
4.1 Creation of the Pakistan Digital Assets Authority
On May 21, 2025, the Ministry of Finance in Islamabad officially approved the formation of the Pakistan Digital Assets Authority (PDAA). This specialized agency is tasked with creating and enforcing a regulatory framework for all blockchain-based financial infrastructure in Pakistan. The PDAA will be responsible for licensing and supervising cryptocurrency exchanges, custodial services, wallets, tokenization platforms, stablecoin issuers, and decentralized finance (DeFi) applications. Through a streamlined licensing process, the PDAA aims to attract reputable global service providers while ensuring that strict anti–money laundering (AML), counter-terrorism financing (CTF), and consumer protection measures are in place.
Under the PDAA’s mandate, any entity dealing in digital assets must hold a valid license, demonstrate adequate capital reserves, and implement know-your-customer (KYC) procedures aligned with Financial Action Task Force (FATF) recommendations. The PDAA will also coordinate with the State Bank of Pakistan (SBP) to develop guidelines for stablecoin issuance and settlement. By integrating digital asset supervision within an official regulatory body, Pakistan intends to create clarity for industry participants, reduce regulatory arbitrage, and mitigate risks associated with unlicensed operators.
4.2 Coordination with Financial Regulators
The PDAA’s board of directors comprises representatives from the Ministry of Finance, the State Bank of Pakistan (SBP), the Securities and Exchange Commission of Pakistan (SECP), and the Federal Law Secretary. This multi-stakeholder structure ensures that monetary policy, capital markets regulation, and legal frameworks are harmonized with digital asset oversight. For example, the SBP is collaborating with the PDAA to define permissible settlement rails for stablecoins, which may include linking stablecoin values to the Pakistani rupee (PKR) or major global fiat currencies, such as the U.S. dollar. Likewise, the SECP is evaluating how tokenized securities platforms can operate under existing capital markets laws.
In parallel, the Pakistan Blockchain Council—which includes industry stakeholders, academic experts, and legal advisors—is advising the PDAA on best practices for decentralized governance and smart contract auditing. The goal is to cultivate a local community of blockchain developers who can audit, certify, and enhance the security of DeFi protocols, thereby reducing systemic risk. By enshrining these regulatory measures into law, Pakistan hopes to strike the right balance between fostering innovation and safeguarding financial stability.
5. IMF’s Reaction and Financial Implications
5.1 IMF Concerns Over Energy Allocation
On May 31, 2025, the International Monetary Fund (IMF) formally expressed reservations about Pakistan’s decision to allocate 2 000 megawatts of electricity to Bitcoin mining and AI data centers. The IMF’s concern centers on Pakistan’s chronic power shortages and the potential fiscal burden that subsidizing energy for mining could impose on an already strained budget. According to official IMF communiqués, routing scarce electricity toward energy-intensive crypto mining activities could exacerbate existing supply deficits, leading to increased load-shedding in residential and industrial sectors. The IMF has requested urgent clarifications from Pakistan’s Ministry of Finance on the economic rationale and cost-benefit analysis behind this initiative.
Furthermore, the IMF’s supplementary reports highlight that Pakistan is in negotiations with the IMF for a new financial support package, amid concerns over mounting foreign debt and dwindling foreign exchange reserves. If mismanaged, directing public resources to support Bitcoin mining could undercut the government’s fiscal consolidation efforts and put additional pressure on state-owned power utilities that are already heavily indebted. The IMF recommended transparency around the cost of subsidized electricity for mining and urged Islamabad to carefully calibrate the subsidy levels to avoid creating unsustainable distortions in the energy market.
5.2 Domestic Debate and Contradictions
Within Pakistan’s financial establishment, there is debate about whether cryptocurrency is legal at all. Despite the launch of the SBR and the creation of the PDAA, senior officials from the SBP and the Ministry of Finance have publicly reiterated that all crypto-related transactions remain illegal under existing law. This stance has created confusion among businesses and prospective investors. On one hand, the federal government displays a forward-looking eagerness to embrace digital assets; on the other, the central bank and financial regulators maintain a prohibitive position.
Critics argue that this regulatory dissonance could scare away institutional investors seeking legal clarity. For instance, some hedge funds have expressed reluctance to engage with Pakistan until the SBP explicitly licenses crypto transactions or issues detailed guidelines on currency conversion and capital repatriation. Meanwhile, proponents of the SBR counter that the initiative is a top-down mandate from the Prime Minister’s office, which will eventually translate into formal legal recognition. The government has signaled that it plans to amend relevant statutes—such as the Payment Systems and Electronic Fund Transfers Act—to carve out explicit allowances for digital asset operations.
6. Global Context: Digital Asset Strategies Worldwide
6.1 Comparison with El Salvador
El Salvador famously became the first country to adopt Bitcoin as legal tender in September 2021, under President Nayib Bukele’s administration. San Salvador’s government used a portion of its foreign reserves to purchase Bitcoin at various entry points, signaling a bold macro-prudential strategy aimed at reducing remittance costs and attracting crypto tourism. However, El Salvador’s experiment has faced criticism due to Bitcoin’s volatility, infrastructural challenges (such as the rollout of Bitcoin kiosks called “Chivo”), and opposition from the Salvadoran Supreme Court. While El Salvador remains a high-profile case, Pakistan’s approach differs by explicitly positioning Bitcoin as a component of its sovereign reserves rather than adopting it as a medium of exchange for daily transactions.
By focusing on a Strategic Bitcoin Reserve intended for long-term holding, Pakistan hopes to sidestep some of the volatility concerns that arise when Bitcoin circulates as everyday currency. Additionally, Pakistan’s plan to combine its SBR with support for mining operations and AI infrastructure distinguishes it from El Salvador’s single-pronged “legal tender” model. Nonetheless, investors will closely watch how Pakistan navigates public backlash—if any—over potential energy shortages or budgetary trade-offs resulting from crypto-related subsidies.
6.2 United States: Proposed National Bitcoin Reserve
While the U.S. does not currently hold Bitcoin in its official reserves, Senator Cynthia Lummis of Wyoming and Senator Kirsten Gillibrand of New York introduced legislation in March 2025 to allow federal agencies to acquire Bitcoin as part of their portfolio. Although this proposal remains in the early stages of congressional review, it signals growing bipartisan interest in digital assets at the federal level. President Trump’s own Council on Digital Assets has reportedly been exploring frameworks for a U.S. Strategic Bitcoin Reserve, mirroring Pakistan’s initiative. If sanctioned, a U.S. SBR could further legitimize Bitcoin as a macroeconomic asset.
Pakistan’s direct engagement with Bo Hines—the same official spearheading digital asset policy in the Trump White House—may thus be aimed at positioning Pakistan as a collaborative partner in shaping international norms for strategic crypto reserves. Given that the U.S. dollar remains the world’s primary reserve currency, any U.S. adoption of Bitcoin in official reserves could have profound implications for how emerging markets like Pakistan manage their own currency risks. By participating in early dialogues, Pakistan seeks to influence regulatory standards and ensure that its SBR is recognized and respected in global financial markets.
6.3 Other Emerging Market Examples
Beyond El Salvador, other Latin American and African nations are exploring ways to integrate Bitcoin and blockchain into their economies. For example, Paraguay has proposed granting tax breaks to Bitcoin miners and exploring the creation of a national digital currency pegged to Bitcoin. Nigeria is piloting blockchain-based land registry systems to combat fraud and increase transparency in property transactions. In India, debates are underway regarding a central bank digital currency (CBDC) issuance, though there is no official SBR initiative yet. Pakistan’s SBR thus emerges amid a broader trend of emerging economies looking for alternative strategies to manage macroeconomic risk, attract foreign investment, and build digital economies.
Russia and Kazakhstan, two major energy-exporting nations, have also permitted large-scale Bitcoin mining operations to utilize inexpensive electricity. Kazakhstan, in particular, has become a hotspot for mining due to its abundant coal resources, although it recently introduced new tax regulations on crypto mining to capture more revenue. Pakistan’s model—rather than simply allowing private miners to operate—channels surplus electricity through government-backed mining or public-private partnerships. This ensures that a portion of mining profits can be redirected into public budgets, theoretically allowing greater control over energy usage and economic outcomes.
7. Future Outlook: Opportunities for Investors and Blockchain Practitioners
7.1 For Crypto Investors
Pakistan’s SBR announcement and the establishment of the PDAA create several avenues for local and international investors interested in digital assets:
- Strategic Bitcoin Exposure: Accredited investors may seek opportunities to participate in Pakistan’s SBR indirectly by investing in funds or vehicles tied to Pakistan’s Bitcoin holdings, provided such offerings comply with local securities laws.
- Mining Infrastructure Projects: Construction firms and technology providers can bid on contracts to build or retrofit data centers designed for Bitcoin mining and AI workloads. These facilities require specialized cooling, grid connections, and security protocols, offering a niche for EPC (engineering, procurement, and construction) contractors.
- DeFi Platform Development: As Pakistan’s regulatory framework clarifies, developers can build decentralized exchanges (DEXs), liquidity pools, and yield-farming protocols tailored to the Pakistani market. Integration with local fiat on-ramps—such as PKR-backed stablecoins—could attract users who currently face high remittance fees and limited banking access.
7.2 For Blockchain Practitioners
Blockchain engineers, smart contract auditors, and cybersecurity specialists will find growing demand for their services in Pakistan:
- Smart Contract Auditing: With the PDAA licensing DeFi applications, third-party audits will become mandatory to ensure code integrity and prevent hacks. Experienced auditors can establish practices focused on Solidity, Rust, and other smart contract languages.
- Regulatory Compliance Solutions: Legaltech firms can develop KYC/AML modules that integrate with Pakistani identity verification systems, such as NADRA (National Database and Registration Authority). These solutions must comply with both FATF recommendations and local laws.
- Academic Research Collaborations: Universities and research institutes are likely to partner with the PCC to develop blockchain curricula, establish incubation labs, and publish open-source frameworks for governance, token economics, and distributed ledger interoperability. Such collaborations can produce a pipeline of local talent equipped to support Pakistan’s digital asset ambitions.
7.3 Potential Risks and Mitigation Strategies
Despite the opportunities, stakeholders should remain cognizant of several risks:
- Regulatory Uncertainty: Until the PDAA fully codifies its regulations into law and the SBP lifts the outright ban on crypto transactions, there will be legal ambiguity. To mitigate this, investors should structure deals with built-in contingency clauses tied to regulatory milestones.
- Energy Infrastructure Strain: Although 2 000 MW has been earmarked for mining and AI, power shortages persist. Private operators should negotiate guaranteed off-peak rates and flexible PPAs that adjust to grid conditions. Implementing real-time energy monitoring and demand response systems can reduce the risk of blackouts affecting core operations.
- Volatility and Security Risks: Bitcoin’s price fluctuations and cybersecurity threats are well known. Participants should adopt hedging strategies—such as options contracts or over-the-counter (OTC) desks—to manage Bitcoin price risk. Onsecurity, multi-layered defense-in-depth architectures, including hardware security modules (HSMs), cold storage, and regular white-hat penetration testing, are essential.
8. Conclusion
Pakistan’s launch of a Strategic Bitcoin Reserve, combined with its plan to allocate 2 000 MW of electricity for Bitcoin mining and AI data centers, marks an ambitious leap into the digital asset era. Bilal Bin Saqib’s high-profile visit to the White House and dialogues with U.S. policymakers underscore Islamabad’s desire to forge international partnerships that legitimize and advance its digital finance agenda. The creation of the Pakistan Digital Assets Authority further signals a commitment to creating a regulatory framework that meets FATF standards and fosters innovation while protecting consumers.
Nonetheless, this strategy faces headwinds. The IMF’s concerns regarding energy allocation and fiscal transparency highlight the need for careful calibration to avoid exacerbating power shortages or undermining debt negotiations. Domestic confusion over the legality of cryptocurrency, fueled by conflicting statements from the SBP and other regulators, necessitates prompt legislative action to clarify the legal status of digital asset activities.
In the global context, Pakistan’s approach mirrors a growing trend among emerging markets to explore Bitcoin as an alternative reserve asset and to harness blockchain technologies for economic modernization. By studying precedents like El Salvador and monitoring developments in other jurisdictions, Pakistan can refine its model to mitigate risks and maximize upside. For investors and blockchain practitioners, Pakistan offers fertile ground for mining infrastructure development, DeFi platform innovation, and regulatory compliance services. As Bitcoin’s role in the macroeconomic landscape continues to evolve, Pakistan’s SBR could become a case study in how emerging economies can integrate digital assets into sovereign financial management.
Ultimately, Pakistan’s digital asset strategy is a high-stakes experiment that blends visionary ambition with practical challenges. If successfully implemented, it could transform the nation into a hub for crypto innovation in South Asia, drawing talent, investment, and technological know-how. If mismanaged, it risks deepening energy shortages, creating fiscal strain, and alienating critical international partners. What remains clear is that Pakistan’s pivot toward Bitcoin and blockchain reflects an urgent desire to leapfrog traditional economic constraints and chart a new course for technological and financial inclusion. Investors, policymakers, and blockchain professionals will be watching closely as Pakistan moves from bold proclamations to on-the-ground execution over the coming months.
