Main Points:
- Pakistan and El Salvador have inked a Letter of Intent (LOI) to collaborate on Bitcoin education, mining, sovereign reserves, and financial inclusion.
- El Salvador holds 6,238 BTC (≈ $745 million), while Pakistan is gearing up under a $7 billion IMF program and faces $100 billion of external financing needs by 2029.
- Pakistan plans to allocate 2,000 MW of surplus electricity to Bitcoin mining and AI data centers.
- The Pakistan Crypto Council (PCC), led by Bilal Bin Saqib, will work alongside El Salvador’s Bitcoin Office to develop policy, regulation, and training.
- International cooperation deepens: Pakistan has engaged Michael Saylor and the White House to refine its strategic reserves plan.
Background: A Strategic Union Between Two Emerging Economies
In mid‑July 2025, Pakistan and El Salvador took a historic step by signing a Letter of Intent (LOI) cementing their collaboration in the cryptocurrency sphere. This agreement marks the first time either nation has placed digital assets at the very center of their bilateral relations. During a meeting in San Salvador, Pakistan’s Special Assistant to the Prime Minister on Blockchain and Crypto and CEO of the Pakistan Crypto Council (PCC), Bilal Bin Saqib, and El Salvador’s President, Nayib Bukele, finalized the details. The LOI lays out a cooperative framework covering: public‑sector blockchain adoption, Bitcoin mining best practices, sovereign digital‑asset reserves, and policy development tailored to emerging markets.
This partnership builds on El Salvador’s pioneering adoption of Bitcoin as legal tender in 2021 and Pakistan’s recent forays into digital asset policy under a $7 billion IMF program aimed at expediting its transition to a digital economy.
Section 1: El Salvador’s Bitcoin Legacy and Expertise
El Salvador etched its place in history in September 2021 by becoming the first nation to grant Bitcoin legal‑tender status. Since then, the government has been on an aggressive accumulation path, amassing 6,238 BTC—valued at approximately $745 million based on current exchange rates. This sovereign holding underlines the centrality of Bitcoin in El Salvador’s economic strategy and diplomatic outreach.
Subsection 1.1: Educational Initiatives
- The National Bitcoin Office (ONBTC) has rolled out nationwide training modules, teaching everything from wallet security to developing Lightning Network applications.
- Stacy Herbert, Director of ONBTC, emphasized that education is a cornerstone: “We are the number‑one country in the world in Bitcoin adoption across capital markets, diplomacy, and education”.
Subsection 1.2: Technical and Mining Know‑How
- El Salvador’s geothermal‑powered Bitcoin mining plants in the Ahuachapán region serve as a model for sustainable energy use.
- Under the LOI, El Salvador will share mining architecture designs, energy‑efficiency data, and environmental‑impact studies to help Pakistan deploy its own green mining operations.
Section 2: Pakistan’s Ambitious Digital‐Economy Push
Though Pakistan’s digital‑asset journey began only in early 2025 with the launch of the PCC, its leadership is moving swiftly. The PCC’s mandate includes drafting FATF‑compliant VASP regulations, integrating blockchain into public‑sector services, and overseeing a planned Strategic Bitcoin Reserve.
Subsection 2.1: Institutional Framework and Energy Allocation
- The PCC, chaired by Finance Minister Muhammad Aurangzeb and led operationally by Bilal Bin Saqib, reports to the Ministry of Finance and works in close consultation with the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan.
- Pakistan plans to dedicate 2,000 MW of surplus electricity to combined Bitcoin mining and AI data‑center operations—a move designed to convert wasted energy into economic value.
Subsection 2.2: Strategic Bitcoin Reserve Plans
- During a keynote at Bitcoin 2025 in Las Vegas, Bilal Bin Saqib announced Pakistan’s intention to create a sovereign, non‑speculative Bitcoin reserve. Although the exact BTC quantity remains under discussion, the reserve will focus on long‑term holding rather than market trading.
- Pakistan has also engaged with Michael Saylor, founder of MicroStrategy, and shared its strategic‑reserve blueprint at the White House to garner international best practices and credibility.
Section 3: Overcoming Challenges—IMF, Regulation, and Funding Needs
Establishing bold digital‑asset initiatives has not been without friction. Pakistan’s earlier proposal to supply subsidized power to miners and AI centers under its IMF‑backed program was rebuffed by IMF officials worried about market distortions. Nonetheless, Pakistan pressed on, aligning its subsidies with market rates and launching the Pakistan Virtual Asset Regulatory Authority (PVARA) in July 2025 to strengthen oversight.
Meanwhile, Pakistan continues to grapple with significant external financing requirements—estimated by the IMF at over $100 billion by 2029 to service and refinance public debt. Proponents of the crypto partnership argue that strategic Bitcoin reserves and blockchain‑powered financial inclusion could become a vital pillar supporting macroeconomic stability.
Section 4: Key Areas of Collaboration and Next Steps
Under the signed LOI, Pakistan and El Salvador will focus on four primary pillars:
- Bitcoin Education and Capacity Building
- Joint training programs for government officials, financial institutions, and university cohorts.
- Sustainable Bitcoin Mining
- Transfer of geothermal‑mining expertise and co‑development of green‑energy mining sites.
- Strategic Sovereign Reserves
- Framework for reserve governance, auditing, and risk management.
- Blockchain‑Driven Financial Inclusion
- Pilot projects for on‑chain social‑welfare disbursement and low‑cost remittance corridors.
A detailed roadmap is expected by Q4 2025, with pilot projects launching in early 2026 across selected Pakistani provinces.
Conclusion
The LOI between Pakistan and El Salvador signals more than a mere bilateral agreement—it heralds a fresh paradigm of “Bitcoin diplomacy.” By intertwining education, mining best practices, sovereign reserves, and inclusion initiatives, both nations aim to harness the transformative power of blockchain for economic resilience. As Pakistan navigates IMF constraints and looming debt challenges, and El Salvador leverages its first‑mover advantage, their alliance may offer a blueprint for other emerging economies seeking to balance innovation with fiscal prudence.
