IMF Raises Alarm Over Pakistan’s 2,000 MW Bitcoin Mining Initiative Amid Broader Crypto Push

Main Points:

• IMF has requested urgent clarification from Pakistan on its plan to allocate 2,000 MW of electricity for Bitcoin mining and AI data centers, potentially complicating ongoing negotiations for a $2.4 billion Extended Fund Facility (EFF).
• Pakistan proposes repurposing three underutilized coal-fired power plants to supply electricity, aiming to utilize surplus capacity, attract foreign investment, and create high-tech jobs.
• Lack of prior consultation with the IMF violates EFF conditions requiring policy coordination, raising concerns about fiscal transparency and macroeconomic stability.
• The formation of the Pakistan Crypto Council (PCC) in March 2025 and appointment of Binance’s former CEO Changpeng Zhao as a strategic advisor signal a rapid shift toward embracing crypto assets at the highest levels of government.
• Establishment of the Pakistan Digital Assets Authority (PDAA) in May 2025 intends to regulate licensing, compliance, and oversight of digital asset activities, but existing legal bans on cryptocurrency trading create confusion.
• Plans for a national Bitcoin reserve and a citizen-facing Bitcoin wallet reflect Pakistan’s ambition to integrate Bitcoin into its national reserve strategy, potentially inspired by El Salvador and the United States.
• Amid chronic energy shortages and public backlash, critics argue that diverting power for mining will exacerbate load-shedding and harm ordinary households, fueling social unrest.
• Despite regulatory hurdles, these initiatives may offer novel revenue streams and practical blockchain use cases, attracting crypto investors seeking new assets and yield opportunities.
• Moving forward, Pakistan must balance IMF conditionality, domestic legal inconsistencies, energy constraints, and investor confidence to realize its blockchain vision.

1. Introduction

In late May and early June 2025, Pakistan announced a sweeping plan to allocate 2,000 MW of electricity toward Bitcoin mining facilities and artificial intelligence (AI) data centers, aiming to harness underutilized energy capacity and fuel a high-tech growth agenda. This decision, however, has drawn a stern response from the International Monetary Fund (IMF), which recently approved a $2.4 billion Extended Fund Facility (EFF) for Pakistan. The IMF asserts that all policy changes by EFF beneficiaries must be coordinated with the Fund—a requirement Pakistan bypassed when unveiling its Bitcoin mining strategy. As Islamabad attempts to pivot toward an aggressive pro-crypto stance, the IMF’s demand for clarification threatens to derail ongoing budget negotiations and exposes the tension between fiscal oversight and digital innovation.

Over the past few months, Pakistan’s political leadership has displayed an unprecedented eagerness to champion cryptocurrencies. In March 2025, Prime Minister Shehbaz Sharif’s administration established the Pakistan Crypto Council (PCC) to draft regulatory frameworks and promote digital asset adoption. By April, the government had named Changpeng Zhao—former CEO of Binance—as a strategic advisor, signaling its intent to learn from global crypto leaders. Early May saw the formation of the Pakistan Digital Assets Authority (PDAA), charged with licensing digital asset operators and ensuring compliance. Most recently, the PCC unveiled plans to accumulate a national Bitcoin reserve and launch a government-backed Bitcoin wallet for citizens, further indicating Islamabad’s determination to embrace blockchain. These measures, however, collide with Pakistan’s existing legal prohibition on cryptocurrency trading, sowing regulatory confusion and drawing domestic criticism.

Against a backdrop of chronic energy shortages, high electricity tariffs, and mounting public frustration over persistent load-shedding, the proposal to redirect power from coal-fired plants to Bitcoin mining has ignited controversy. Critics question whether the move prioritizes speculative digital assets over citizen welfare. Yet supporters argue that leveraging surplus capacity will generate high-tech employment, attract foreign capital, and stimulate Pakistan’s nascent blockchain ecosystem. To understand the full scope of this initiative—its potential benefits, challenges, and implications for investors—this article provides an in-depth analysis of Pakistan’s Bitcoin mining plan, IMF’s response, emerging crypto governance structures, energy sector dynamics, and future outlook for blockchain-driven revenue opportunities in the country.

2. IMF’s Warning and Negotiation Challenges

2.1 IMF Loan Terms and Coordination Requirement

In early May 2025, the IMF approved Pakistan’s $2.4 billion loan under the Extended Fund Facility, intended to stabilize the country’s fragile macroeconomic situation marked by low foreign reserves, high fiscal deficits, and persistent inflation. EFF programs mandate that participating countries consult the IMF before implementing any major policy shifts—especially those with significant fiscal or balance-of-payments implications. This mechanism ensures program integrity by allowing the IMF to assess risks, vet assumptions, and align policy measures with broader stabilization goals.

By allocating 2,000 MW of electricity for Bitcoin mining and AI data centers without prior IMF consultation, Pakistan breached this critical EFF condition. According to an anonymous government official, the IMF has communicated that failure to engage proactively on such policy decisions could jeopardize disbursement tranches and undermine confidence in the program. As the IMF deliberates on releasing future funding tranches, Islamabad’s omission complicates ongoing budget talks and intensifies scrutiny of Pakistan’s fiscal trajectory. The Fund’s concern centers on two points: first, whether power diverted to mining will exacerbate subsidy burdens; and second, whether Bitcoin-related revenue projections are realistic under current regulatory and global market conditions.

2.2 Government’s Response and Stakeholder Concerns

While Pakistan’s finance ministry has acknowledged the IMF’s queries, officials maintain that the Bitcoin mining plan aligns with the broader objective of utilizing idle generation capacity. They argue that existing coal-fired plants suffer from low utilization rates, generating surpluses that could be tapped for high-value sectors. Yet opposition parties, civil society groups, and energy experts have voiced concerns: during peak summer months, millions experience up to twelve hours of daily blackout. Diverting scarce power resources to speculative digital mining ventures risks worsening load-shedding, stoking social unrest, and fueling political backlash.

An energy analyst based in Karachi pointed out that repurposing coal plants for mining without first addressing technical constraints—such as outdated grid infrastructure, transmission bottlenecks, and seasonal generation shortfalls—could lead to operational inefficiencies. Moreover, given global Bitcoin mining difficulty curves and volatile cryptocurrency prices, projected yields may not cover the incremental fuel and maintenance costs, raising doubts about fiscal viability. The IMF’s insistence on a thorough cost-benefit analysis underscores the need for Pakistan to justify the mining allocation within the parameters of its economic reform agenda.

3. Pakistan’s Ambitious Electricity Allocation for Crypto and AI

3.1 Repurposing Coal-Fired Power Plants

Pakistan currently operates three coal-fired power plants—Jamshoro (560 MW), Port Qasim (1,320 MW), and Sahiwal (1,320 MW)—all of which run below capacity due to fluctuating fuel supplies, maintenance issues, and rising costs of imported coal. The decentralization of these plants has created a scenario where peak generation seldom matches demand, leading to both underutilization and sustained load-shedding. By earmarking a combined 2,000 MW for Bitcoin mining and AI data centers, the government aims to convert sunk generation capacity into revenue-generating activity.

Under this plan, existing coal plants will be retrofitted with specialized high-performance computing units dedicated to hashing algorithms for Bitcoin, alongside secure data center facilities for AI workloads. By clustering mining rigs and AI servers, plant operators can negotiate economies of scale on electricity costs while PDP (Pakistan Digital Assets Authority)–licensed crypto mining firms will invest in infrastructure upgrades. Additionally, idle transmission lines and substations can be reactivated to deliver power to emerging high-tech zones, ostensibly reducing curtailment losses. However, critics caution that without parallel investments in grid modernization—such as smart transformers, synchronous condensers, and advanced load-balancing systems—integrating such dense computing loads could precipitate voltage fluctuations and grid instability.

3.2 Potential Economic Upsides

Proponents argue that reallocating surplus generation to high-margin digital industries can:

• Generate Foreign Direct Investment (FDI): By offering subsidized or wholesale electricity rates to PCC-approved crypto firms, Pakistan can attract global mining pools and AI investors seeking lower power costs compared to Western markets.
• Increase Employment in Tech Sectors: Establishing blockchain-powered data centers will create jobs for system engineers, data scientists, and network administrators, addressing unemployment among STEM graduates.
• Expand Export Revenue Streams: Crypto mining yields can be converted to foreign currency, bolstering Pakistan’s depleted dollar reserves. AI data services hosted in Pakistan could serve regional clients, driving export diversification.
• Accelerate Blockchain Innovation: Homegrown mining operations may spur local blockchain startups, from DeFi protocols to enterprise-grade DLT (Distributed Ledger Technology) solutions, fostering a nascent ecosystem.

If executed effectively, these gains could complement Pakistan’s broader digital transformation goals—such as the National Digital Policy 2020—by adding an advanced infrastructure layer for AI research and blockchain incubation. Yet to materialize these outcomes, the government must establish transparent tariff structures, robust cybersecurity measures, and clear regulatory frameworks under the PDAA’s oversight, while simultaneously ensuring that surplus power allocation does not compromise essential services for households and industrial users.

4. Emerging Crypto Governance: PCC and PDAA

4.1 Formation of the Pakistan Crypto Council (PCC)

In March 2025, Prime Minister Shehbaz Sharif inaugurated the Pakistan Crypto Council (PCC) as a public-private advisory body tasked with designing regulatory standards, shaping policy guidelines, and promoting blockchain adoption across government and industry. Headed by Bilal bin Saqib—Pakistan’s first Minister for Crypto and Blockchain, and concurrently CEO of the PCC—the council’s mandate includes drafting anti–money-laundering (AML) protocols for cryptocurrency exchanges, integrating blockchain into financial service delivery, and exploring use cases such as cross-border remittances via stablecoin frameworks.

In addition to domestic experts, the PCC has onboarded several international advisors. Most notably, Changpeng Zhao, former CEO of Binance, was appointed as a strategic advisor in April 2025. His presence is intended to facilitate knowledge transfer on global best practices for exchange licensing, cybersecurity risk mitigation, and decentralized finance (DeFi) product oversight. The PCC has also initiated working groups to explore Central Bank Digital Currency (CBDC) frameworks, interoperability standards for multi-chain wallets, and smart contract audit protocols. Through periodic white papers and public consultations, the PCC seeks to create a transparent, consultative approach to regulation—though skeptics remain wary that the pace of policy formation may outstrip procedural safeguards, leading to undue operational risk.

4.2 Establishment of the Pakistan Digital Assets Authority (PDAA)

Building on the PCC’s recommendations, the federal government launched the Pakistan Digital Assets Authority (PDAA) in May 2025 to serve as the primary regulatory body overseeing digital asset activities. The PDAA’s core functions include:

1. Licensing and Supervision: Reviewing applications for cryptocurrency exchange operations, mining farms, DeFi platforms, and blockchain-based service providers; issuing licenses contingent on capital adequacy and risk management protocols.
2. Compliance Enforcement: Implementing AML/KYC policies for digital asset firms, in line with Financial Action Task Force (FATF) guidelines; conducting regular audits to ensure adherence to cybersecurity and data protection standards.
3. Consumer Protection: Establishing mechanisms for dispute resolution, investor education, and grievance redressal; mandating minimum solvency and insurance coverage for licensed entities.
4. Market Surveillance: Monitoring trading activity for market manipulation, wash trading, and insider abuse; coordinating with the State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP) for cross-functional oversight.

Despite these formal structures, a fundamental tension exists: while the PCC and PDAA aim to open Pakistan’s market to digital assets, existing laws still deem cryptocurrency trading illegal. Under the SBP’s 2018 circular, crypto transactions are not recognized as legal tender, and facilitating digital asset trading can incur penalties. This legal incongruity has left investors uncertain about compliance obligations and has prompted policymakers to draft amendments to the Pakistan Prevention of Electronic Crimes Act (PPECA) to explicitly carve out exceptions for licensed digital asset activities. Until such amendments pass parliament, the regulatory vacuum may deter institutional investment despite the government’s apparent pro-crypto orientation.

5. Strategic Bitcoin Reserve and National Wallet Plans

5.1 Proposal for a National Bitcoin Reserve

At the Bitcoin 2025 conference in Las Vegas (May 28, 2025), Bilal bin Saqib announced Pakistan’s intention to establish a national Bitcoin reserve akin to a sovereign wealth fund denominated in cryptocurrency. According to his address, Pakistan would hold a fixed Bitcoin allocation in a government-controlled wallet, with no plans for short-term liquidation. By designating Bitcoin as a strategic reserve asset, Pakistan aims to hedge against currency devaluation, diversify external reserves, and signal long-term commitment to digital finance. Officials cited inspiration from El Salvador’s 2021 Bitcoin adoption and recent U.S. interest in crypto policy as guiding precedents .

Proponents argue that adding Bitcoin to the reserve portfolio could offer upside potential if global adoption accelerates—particularly as institutional demand rises for perceived digital scarcity. Moreover, by adopting a “buy and hold” framework, Pakistan could limit exposure to trading volatility. However, macroeconomists warn that Bitcoin’s historical standard deviation far exceeds that of conventional assets, introducing sizable valuation risk into the central bank’s balance sheet. Critics also question transparency: unlike traditional reserves held in gold or foreign currencies, digital wallets are susceptible to cybersecurity breaches, regulatory shifts, and network disruptions. Without clear governance protocols—such as multi-signature custody, transparent auditing, and predefined risk limits—the strategic reserve concept may remain more rhetorical than practical.

5.2 Citizen-Facing Bitcoin Wallet Initiative

Beyond the reserve, Pakistan’s crypto advisor to Prime Minister Sharif announced plans to launch a government-backed Bitcoin wallet for citizens. This mobile wallet would enable Pakistani residents to receive, store, and transact in Bitcoin directly, with features including:

• Onboarding via National ID Verification: Leveraging NADRA (National Database and Registration Authority) integration for instant identity verification.
• Fiat-On/Off Ramps: Partnering with licensed exchanges to facilitate seamless conversion between Pakistani rupees (PKR) and Bitcoin, subject to PDAA-curated counterparty lists.
• Educational Resources: Embedding tutorials on secure key management, transaction best practices, and decentralized finance basics to mitigate user risk.
• Incentive Programs: Offering small Bitcoin rewards for referrals, merchant adoption, and early sign-ups to spur network effects.

If adopted widely, a citizen-focused wallet could drive grassroots blockchain literacy, expand financial inclusion for the unbanked, and catalyze P2P commerce in regions where banking services are scarce. Nonetheless, skeptics raise concerns about cybersecurity: a state-sponsored wallet could become a high-value target for hackers seeking to capture private keys. In addition, the capacity of local exchanges to handle large volumes of on/off ramps remains untested, raising liquidity and settlement risk. Ultimately, execution hinges on clear technical standards for wallet audits, robust encryption protocols, and contingency planning for network outages.

6. Energy Crisis and Public Backlash

6.1 Chronic Load-Shedding and Domestic Hardship

Pakistan’s energy sector has long struggled with chronic supply-demand imbalances. Despite total generation capacity exceeding 37,000 MW, the country frequently experiences peak shortages of 4,000–5,000 MW due to fuel import constraints, distribution losses, and outdated infrastructure. In rural Sindh and Punjab, households endure up to twelve hours of daily load-shedding during summer peaks, with industrial zones also impacted by erratic supply. Meanwhile, high electricity tariffs—especially for late-payment penalties—have sparked protests among lower-income communities.

Against this backdrop, reallocating 2,000 MW toward Bitcoin mining and AI data centers feels tone-deaf to many citizens who lack reliable basic power. Social media posts lament that affluent crypto entrepreneurs and foreign investors will receive subsidized energy while ordinary families cope with blackouts. Opposition politicians have decried the plan as “energy piracy,” accusing the government of prioritizing speculative technology over households and agriculture. NGOs working in rural electrification warn that further diverting power will undermine progress in bridging the urban-rural digital divide and impede efforts to expand Internet access for e-learning and telemedicine .

6.2 Critiques of Economic Prioritization

Critics argue that, given Pakistan’s looming debt obligations and IMF-driven austerity measures, redirecting scarce resources to unproven digital asset ventures reflects a mismatch in priorities. An editorial in a leading Karachi financial daily questioned whether mining operations—prone to margin compression when Bitcoin’s difficulty rises—will generate returns commensurate with the subsidies provided. They advocate that energy subsidies should instead focus on manufacturing, agriculture, and small- to medium-sized enterprises (SMEs) that directly create jobs and export goods. The IMF, for its part, has flagged that electricity subsidies inflate circular debt—Pakistan’s cumulative power sector debt now exceeds $12 billion—raising concerns that mining firms may default on payments if Bitcoin prices drop suddenly.

Moreover, environmental activists note that relying on coal-fired power for energy-intensive mining undermines Pakistan’s commitments to reduce carbon emissions under the Paris Agreement. With global pressure mounting to decarbonize data centers and shift toward renewable energy, Pakistan risks entrenching carbon-intensive industries. While officials argue that repurposing existing coal plants avoids new carbon emissions from fresh construction, critics retort that extending the operational life of coal stations while diverting revenue to opportunistic mining profits contradicts international climate best practices. As Pakistan navigates its dual goals of economic growth and environmental sustainability, the Bitcoin mining plan highlights the trade-offs policymakers face between innovation and social responsibility.

7. Implications for Crypto Investors and Blockchain Use Cases

7.1 Opportunities for Crypto Investors

For investors seeking new crypto assets and yield sources, Pakistan’s pivot may open several avenues:

1. Mining Contracts: Foreign and domestic mining firms can bid for electricity allocation licenses, gaining access to subsidized power that can improve profit margins during periods of high Bitcoin prices.
2. Data Center Expansion: AI-focused data centers leveraging the same electricity allocation could offer colocation services to international cloud providers, potentially earning hard currency revenue.
3. Local Exchange Growth: As PDAA licenses domestic exchanges, increased trading volumes may spur liquidity and reduce spreads, making PKR/BTC pairs more attractive for arbitrageurs.
4. Blockchain Startups: Startups focusing on DeFi protocols, NFT marketplaces, and stablecoin payment systems may find support from PCC grants or accelerator programs, particularly if they propose use cases aligned with remittances or supply chain finance.

However, investors must weigh regulatory uncertainty—given the continued legal ban on cryptocurrency trading—and technical risks, such as power grid reliability. Partnerships with established Pakistani conglomerates experienced in energy sector logistics may mitigate some operational risks. Additionally, international investors will watch closely how the IMF and multilateral agencies respond; if financing disbursements stall, macroeconomic instability could undermine project viability.

7.2 Practical Blockchain Use Cases

Beyond mining, Pakistan’s crypto agenda emphasizes practical blockchain implementations, including:

• Cross-Border Remittances: Pakistani expatriates send over $30 billion annually in remittances. By adopting stablecoin rails or permissioned blockchain networks, transaction fees and settlement times could be reduced, boosting foreign exchange inflows.
• Agricultural Supply Chains: Pilots using blockchain for crop certification, traceability, and smart contracts for outgrower schemes could enhance transparency, reduce fraud, and attract premium prices for Pakistani exports (e.g., mangoes, rice, textiles).
• Agritech Microfinance: Decentralized credit pools leveraging tokenized collateral could enable farmers to access microloans without traditional banking hurdles, although KYC/AML controls must be robust to prevent fraud.
• Identity and Land Registry: Nation-scale blockchain identifiers could streamline e-governance services, secure land titles, and reduce litigation over property disputes—though data privacy and system integration remain challenges.

These initiatives align with PCC working group objectives. If successful, such pilots could lay the foundation for scaled blockchain deployment across healthcare, energy trading, and voting systems, fostering a more inclusive digital economy. However, ensuring interoperability between legacy databases (e.g., NADRA, SECP Entities Registry) and new DLT platforms will require significant public sector investment in capacity building, standards development, and cybersecurity frameworks.

8. Broader Regional and Global Context

8.1 Benchmarking Against El Salvador and Other Pioneers

El Salvador’s adoption of Bitcoin as legal tender in September 2021 provides a point of reference. While El Salvador’s plan included granting small Bitcoin subsidies (“Chivo” wallets) to citizens, it faced challenges related to volatility risk, bank interoperability, and public skepticism. Pakistan’s approach differs insofar as it does not (yet) enshrine Bitcoin as legal tender; rather, it sees Bitcoin as a strategic reserve asset and energy-intensive mining target. Moreover, Pakistan’s intention to retain mining revenues in foreign currency and use them to stabilize reserves marks a departure from El Salvador’s immediate integration into the payment ecosystem. Despite these differences, El Salvador’s experience underscores the importance of robust user education, cybersecurity safeguards, and contingency funds to cushion adverse price movements. Lessons learned from El Salvador’s teething problems—such as initial wallet adoption hurdles, merchant integration delays, and IMF pushback—resonate strongly with Pakistan’s policymakers and investors.

8.2 Regional Crypto Trends and Competition

In South Asia, regulators have taken diverse stances on cryptocurrencies. India’s Supreme Court overturned a prior ban in March 2020, allowing exchanges to operate under Reserve Bank of India (RBI) guidelines. Bangladesh and Nepal maintain strict prohibitions; Sri Lanka is exploring a digital rupee, while the Maldives is piloting blockchain-based land registry projects. Pakistan’s aggressive move to allocate electricity for mining and build digital asset governance frameworks places it among regional frontrunners in embracing crypto, though it must navigate political and energy constraints unique to its circumstances.

Neighboring Central Asian markets—Kazakhstan and Uzbekistan—have actively courted mining operations, offering tax incentives and cheap electricity (primarily from coal and hydropower). However, Kazakhstan’s 2022 crackdown on mining due to blackouts reveals the fragility of the model. Pakistan’s reliance on older coal plants mirrors Kazakhstan’s energy portfolio, implying risk of similar disruptions if grid resilience is not reinforced. Given that China banned domestic mining in 2021, many Chinese mining firms have looked to Southeast Asia and Central Asia. Pakistan could position itself as a viable alternative, but only if it demonstrates grid stability, favorable tariff structures, and clear regulatory pathways—factors that have stalled investor confidence elsewhere.

9. Recent Developments and Emerging Data (June 2025)

9.1 Reuters Report on Energy Allocation and Economic Strategy

On May 25, 2025, Reuters reported that Pakistan’s finance ministry confirmed the first phase of allocating 2,000 MW to Bitcoin mining and AI data centers. The report emphasized that this strategy aims to leverage surplus capacity while addressing loan conditionality tied to energy sector fiscal stabilization. Authorities maintained that mining operations will pay market-based tariffs sufficient to cover fuel costs and plant maintenance, with incremental revenues channeled into grid improvements. However, energy analysts noted that ancillary investments—such as high-voltage transmission lines and cooling infrastructure—would be required to achieve operational viability, potentially offsetting profit margins for mining firms.

9.2 Times of India Coverage of National Bitcoin Reserve

According to a Times of India dispatch dated May 28, 2025, Bilal bin Saqib crystallized Pakistan’s “Bitcoin promise” by announcing a national Bitcoin reserve at the Bitcoin 2025 Vegas conference. He clarified that the government intends to acquire Bitcoin gradually over the next twelve months, beginning with an initial tranche funded through existing foreign reserves. The Islamabad statement underscored that the Bitcoin reserve would act as a hedge against possible PKR depreciation, particularly if global interest rates rise. The PCC also plans to create a transparent on-chain dashboard enabling public scrutiny of reserve holdings and transactional flows to mitigate corruption risks. This level of transparency aims to assuage domestic critics wary of opaque crypto spending.

9.3 Contradiction Between Domestic Ban and Pro-Crypto Push

Just two days after the Bitcoin conference announcement, another Times of India report (June 1, 2025) highlighted internal contradictions: senior officials in the State Bank of Pakistan and Ministry of Finance reiterated that cryptocurrencies remain banned under current legislation, and all unlicensed crypto exchanges are illegal. This conflicting messaging has created confusion among potential investors, with some analysts predicting that without explicit legislative amendments, licensed exchanges’ operations could be challenged in courts. Parliamentary debate on amending the PPECA (Pakistan Prevention of Electronic Crimes Act) is expected to commence in July 2025, potentially reconciling legal inconsistencies if lawmakers endorse carve-outs for licensed digital asset activities.

9.4 Public Protest and Energy Shortage Backlash

A local newspaper in Karachi (May 30, 2025) ran an exposé featuring interviews with household consumers detailing up to fourteen hours of daily power cuts. Protesters blockaded city roads demanding immediate grid restoration and redistribution of any electricity earmarked for mining back to residential feeders. Civil society groups staged demonstrations outside the finance ministry, carrying placards reading “Power for People, Not for Plots” and “Crypto Shouldn’t Steal Our Light.” As of early June 2025, provincial governments in Sindh and Punjab have petitioned the federal cabinet to pause mining licenses until baseline service levels reach an agreed threshold—further complicating rollout timelines for crypto-centric projects.

10. Future Outlook and Strategic Considerations

10.1 Balancing IMF Conditionality and Domestic Priorities

Pakistan’s leadership faces a delicate balancing act: meeting IMF conditions to unlock disbursement tranches while fulfilling political promises to nurture a vibrant crypto ecosystem. The IMF’s next Board review is scheduled for late July 2025. To secure continued financing, Pakistan must present a cohesive plan demonstrating that Bitcoin mining won’t exacerbate fiscal deficits or energy sector debt. This likely entails publishing a detailed cost-benefit analysis, clarifying tariff structures, and showcasing projected foreign exchange gains from crypto revenue streams. It may also require negotiating with the IMF to recognize the Bitcoin reserve as an alternative reserve asset—an unprecedented precedent that will test conventional IMF policy frameworks toward nontraditional reserves.

10.2 Regulatory Reforms and Legal Harmonization

For the PCC and PDAA to function effectively, Pakistan’s parliament must reconcile existing prohibitions with the new pro-crypto agenda. Stakeholders anticipate that proposed amendments to the PPECA, the Electronic Transactions Ordinance, and the Securities Act will delineate categories of legal digital asset activities—mining, exchange operations, wallet provisioning, and crypto-backed financial products—while preserving anti–money-laundering safeguards. Clear licensing criteria, capital requirements, and corporate governance norms will be essential to attract institutional investors. Additionally, cooperation agreements with global regulators—such as the U.S. SEC, FATF, and EU’s Markets in Crypto-Assets (MiCA) framework—may lend credibility and facilitate cross-border capital flows for Pakistani crypto firms.

10.3 Grid Modernization and Renewable Integration

To prevent grid overload and environmental degradation, Pakistan must invest in modernizing its power infrastructure. Potential measures include:

• Diversifying Power Mix: Expanding solar and wind capacities, which currently comprise less than 7 percent of total generation, can reduce reliance on coal for mining operations and align with global decarbonization targets.
• Deploying Smart Grid Technologies: Installing digital substations, automated load-shedding protocols, and real-time demand-response systems can optimize electricity allocation, ensuring mining rigs operate only during off-peak hours.
• Energy Storage Solutions: Incorporating battery storage and pumped hydro systems can absorb surplus renewable energy, later redirecting it to compute-intensive data centers and mining farms without burdening the main grid.
• Public-Private Partnerships (PPPs): Encouraging international technology providers to partner with local utilities could accelerate adoption of microgrid solutions for isolated high-tech zones near power plants.

By coupling crypto mining plans with tangible grid upgrades, Pakistan could mitigate blackout risks while signaling a long-term commitment to sustainable energy practices.

11. Conclusion

Pakistan’s decision to allocate 2,000 MW of electricity for Bitcoin mining and AI data centers represents a bold, if controversial, attempt to leverage underutilized power capacity for economic diversification. The move underscores Islamabad’s broader strategy of embracing blockchain and cryptocurrency—evident in the formation of the Pakistan Crypto Council, establishment of the Pakistan Digital Assets Authority, and proposals for a national Bitcoin reserve and citizen-facing wallet. However, this initiative has ignited a complex web of challenges: an IMF warning over nonconsultation, legal inconsistencies given the domestic ban on crypto trading, widespread public anger amid energy shortages, and environmental concerns associated with coal-dependent mining.

For crypto investors and blockchain enthusiasts, Pakistan’s evolving regulatory landscape may offer novel opportunities, from subsidized mining contracts to DeFi and AI data services. Yet the realization of these prospects hinges on Pakistan’s ability to harmonize policy objectives with IMF conditionality, modernize its grid infrastructure, and align legal frameworks to resolve contradictions. Should Islamabad successfully navigate these hurdles, the country could emerge as a pioneering hub for high-tech blockchain innovation in South Asia, potentially unlocking foreign direct investment and generating new revenue sources. Conversely, failure to secure IMF buy-in, contain public backlash, and attract credible investors risks relegating this pro-crypto experiment to a cautionary tale of untimely ambition.

As of June 2025, Pakistan’s journey toward becoming a crypto-forward economy is still in its infancy. The next few months—marked by parliamentary debates on legal amendments, IMF board assessments, and pilot mining rollouts—will determine whether this bold vision transforms into a sustainable growth driver or falters under the weight of macroeconomic and energy sector realities.