Pakistan’s Bold Crypto Pivot: Establishing a Bitcoin Strategic Reserve

Main Points:

• Pakistan announces the creation of a government-led Bitcoin Strategic Reserve, marking a reversal from its prior anti-crypto stance.
• The initiative was unveiled by Bilal Bin Saqib at the Bitcoin 2025 conference in Las Vegas.
• Pakistan allocates 2,000 MW of surplus electricity for Bitcoin mining and AI data centers.
• The Pakistan Crypto Council (PCC), led by Bilal Bin Saqib and advised by Changpeng Zhao, underpins the new strategy.
• A new Digital Asset Authority will regulate crypto platforms and license digital asset providers domestically.
• International partnerships, including with World Liberty Financial and WLFI, aim to bolster DeFi infrastructure and asset tokenization.
• Economic benefits include foreign investment attraction, high-tech job creation, and enhanced digital exports.
• Risks remain around regulatory oversight, energy sustainability, and integration with global financial systems.

1. A Historic Shift in Pakistan’s Crypto Policy

In a watershed announcement on May 28, 2025, Pakistan declared its intention to establish a government-led Bitcoin Strategic Reserve, signalling a dramatic policy U-turn from its former hardline stance against digital assets. The declaration came at the high-profile Bitcoin 2025 conference in Las Vegas, where Bilal Bin Saqib, the country’s Special Assistant to the Prime Minister on Blockchain and Cryptocurrency and CEO of the newly formed Pakistan Crypto Council (PCC), addressed a global audience of industry leaders. He explicitly credited the United States’ emerging plans for a strategic BTC reserve as inspiration for Pakistan’s move, underscoring a growing trend of national governments embracing crypto as a component of economic strategy.

Historically, Pakistan had maintained that cryptocurrencies would never be legalized domestically, citing concerns over financial stability and illicit finance. This pivot therefore represents one of the most significant volte-faces in national crypto regulation to date, positioning Pakistan to join a select group of countries exploring sovereign Bitcoin holdings.

2. The Announcement at Bitcoin 2025

At the Venetian Convention Center on May 28, 2025, Bilal Bin Saqib took the stage to declare, “Today is a very historic day. I announce the Pakistani government is setting up its own government-led Bitcoin Strategic Reserve. And we want to thank the United States of America again because we were inspired by them.” He emphasized that this reserve would initially leverage seized or forfeited BTC holdings, similar to the U.S. plan to utilize approximately 200,000 BTC collected through criminal and civil forfeitures. While he did not disclose the exact size of Pakistan’s initial Bitcoin reserve, he made clear that the holdings would not be deployed for speculative trading but rather held as a strategic national asset.

Saqib added that the Bitcoin Strategic Reserve would be “just the beginning” of Pakistan’s comprehensive embrace of the digital asset ecosystem, hinting at further regulatory and infrastructural reforms to come.

3. Powering the Crypto Future: 2,000 MW for Mining and AI

Concurrent with the reserve announcement, Pakistan’s finance ministry revealed the allocation of 2,000 megawatts of surplus electricity to support Bitcoin mining operations and high-performance AI data centers. This strategy seeks to address the country’s chronic electricity overcapacity—stemming from fiscal inefficiencies and a surge in renewable generation—by channeling unused power into cutting-edge tech industries.

Led by the government-backed Pakistan Crypto Council, this energy allocation is expected to:

1. Attract Foreign Miners and Investors: By offering competitive power rates and infrastructure incentives, Pakistan aims to draw global mining firms to establish facilities on its soil.
2. Create High-Tech Employment: The development of mining farms and AI hubs anticipates generating thousands of specialized jobs in engineering, IT, and facility management.
3. Enhance Grid Stability: Efficient utilization of excess supply could alleviate fiscal burdens on the national grid and optimize asset utilization during off-peak hours.

This marks the latest phase of Pakistan’s digital infrastructure push, following an April 2025 plan assigning 2,000 MW to mining and AI announced by the PCC earlier that year.

4. The Pakistan Crypto Council: Leadership and Mandate

Established in March 2025, the Pakistan Crypto Council (PCC) is the central organ driving the government’s new digital asset strategy. Chaired by Federal Finance Minister Muhammad Aurangzeb, with Bilal Bin Saqib serving as CEO, the PCC convenes key stakeholders from the State Bank of Pakistan, technology ministries, and legal experts to craft comprehensive crypto policy.

In April 2025, PCC appointed Changpeng Zhao (CZ), co-founder of Binance, as a strategic adviser to guide infrastructure development, regulatory frameworks, and sandbox initiatives for DeFi testing. CZ’s involvement underscores Pakistan’s intent to leverage global crypto expertise while navigating compliance imperatives after his legal settlement in the United States.

Key PCC objectives include:

• Regulatory Framework Design: Drafting laws for crypto licensing, taxation, anti-money laundering (AML), and consumer protection.
• Sandbox Environments: Creating controlled testbeds for DeFi protocols, tokenization pilots, and blockchain pilots.
• Industry Collaboration: Partnering with universities, research institutions, and private sector players to foster innovation in smart contracts, digital IDs, and financial inclusion.

5. Establishing the Digital Asset Authority

In May 2025, Pakistan’s finance ministry formally directed the creation of the Digital Asset Authority (DAA), charged with onshore crypto regulation and licensing of digital asset service providers. The DAA will function as a dedicated regulator akin to securities commissions, focusing exclusively on:

• Registration and Licensing: Vetting and approving crypto exchanges, custodians, and wallet providers.
• Compliance Oversight: Enforcing AML, Know Your Customer (KYC), and cybersecurity standards.
• Consumer Protection: Managing dispute resolution, fraud investigations, and restitution mechanisms.

This move separates digital asset oversight from traditional banking regulators, reflecting the specialized expertise required to govern rapidly evolving blockchain technologies.

6. International Collaborations: DeFi, Tokenization, and Beyond

Pakistan’s crypto pivot extends beyond domestic policy to active international partnerships:

1. World Liberty Financial (WLFI): On April 27, 2025, WLFI—which promotes the USD₱1 stablecoin and DeFi infrastructure under the Trump-linked umbrella—signed a memorandum to support Pakistan’s tokenization of real-world assets and build DeFi architectures for public utilities and agriculture.
2. Binance Collaboration: Beyond CZ’s advisory role, Binance has indicated plans to help establish regulatory sandboxes and share best practices for exchange operations and stablecoin governance.
3. IMF and FATF Engagement: The PCC’s affiliations with the International Monetary Fund and Financial Action Task Force aim to ensure international compliance, drawing on global standards to mitigate illicit finance risks.

These partnerships enhance Pakistan’s credibility in the global fintech sphere and promise technology transfers critical for scaling its digital economy.

7. Economic Implications and Growth Prospects

Pakistan’s strategic embrace of crypto assets brings several potential economic benefits:

• Foreign Direct Investment (FDI): By offering regulatory clarity and infrastructure support, Pakistan hopes to attract billions in crypto-related FDI, as seen in similar initiatives in the U.S. and Central Asian republics.
• High-Value Job Creation: Development of mining, AI, and blockchain R&D centers could create tens of thousands of skilled positions, aiding youth employment and curbing brain drain.
• Export of Digital Services: With 15–20 million existing crypto users, Pakistan is well-positioned to export blockchain solutions, freelance coding, and DeFi development services, bolstering digital export revenues.
• Grid Optimization Revenue: Monetizing surplus power through mining contracts can generate additional government revenues and reduce grid maintenance costs.

These initiatives align with Pakistan’s broader vision to become a regional tech hub, leveraging its large English-speaking workforce and competitive operational costs.

8. Risks, Challenges, and Regulatory Considerations

Despite the promise, Pakistan’s crypto strategy must navigate significant risks:

• Energy Sustainability: Although surplus electricity exists, scaling mining operations could strain local distribution networks and displace residential demand if not carefully managed.
• Regulatory Enforcement: The DAA must build enforcement capacity rapidly to oversee diverse crypto actors and prevent money laundering or consumer scams.
• Global Financial Integration: Aligning with FATF guidelines and international tax information exchange will be crucial to maintain correspondent banking relationships.
• Market Volatility: Holding national reserves in Bitcoin exposes fiscal balances to BTC price swings. Pakistan will need hedging mechanisms or clear policy guardrails to mitigate market risk.

Addressing these challenges demands robust technical expertise, institutional coordination, and continuous stakeholder engagement.

9. Future Outlook: From Pilot to Mainstream

Looking ahead, Pakistan’s roadmap likely includes:

1. Gradual Reserve Build-Up: Phased acquisition of BTC—possibly via a combination of seized assets, direct purchases, and mining yields—to reach a target percentage of forex reserves.
2. DeFi Sandbox Launch: Live testing of decentralized lending, tokenized debt instruments, and digital identity solutions for remittances and social welfare disbursement.
3. Stablecoin Legislation: Following the U.S. GENIUS Act model, drafting laws for pegged tokens to facilitate remittances from overseas Pakistani workers.
4. Public–Private Consortia: Engaging major telecoms, banks, and fintech startups to develop payment rails and CBDC interoperability.

If executed effectively, Pakistan could emerge as a pioneering example of how emerging markets integrate crypto into national economic strategy, balancing innovation with compliance.

Conclusion

Pakistan’s announcement of a Bitcoin Strategic Reserve, underpinned by significant energy allocations and the establishment of specialized regulatory bodies, represents one of the most ambitious national crypto initiatives to date. Driven by the Pakistan Crypto Council and informed by global precedents, this pivot seeks to harness blockchain technology for economic growth, job creation, and digital infrastructure development. However, the government must carefully manage energy sustainability, regulatory enforcement, and market volatility to realize these benefits. As Pakistan embarks on this historic journey, its progress will be closely watched by nations worldwide contemplating similar crypto strategies.