The International Monetary Fund (IMF) has slammed Pakistan’s ambitious plan to dedicate massive electricity resources to Bitcoin mining. This surprising move comes during critical talks about Pakistan’s financial future. The global lender demands urgent answers from Islamabad. Pakistan’s government wants to allocate a huge 2,000 megawatts for Bitcoin mining and AI data centres. However, the nation already suffers severe power shortages.
Pakistan’s Crypto Gamble
Pakistan unveiled its bold digital asset strategy last week. Officials announced the plan at the high-profile Bitcoin Vegas 2025 conference. The goal is attracting foreign blockchain miners and AI companies. State Minister Bilal bin Saqib confirmed the 2,000 MW allocation. This forms part of a wider push into digital finance. Simultaneously, Pakistan launched its first official Bitcoin reserve. The government also promised a national Bitcoin wallet. Authorities also established the Pakistan Digital Asset Authority (PDAA) in May. This body will regulate crypto exchanges and tokenise national assets. Previously, Pakistan formed a National Crypto Council in February. Changpeng Zhao, Binance’s co-founder, joined this council as an adviser in April. He will help shape Pakistan’s crypto rules and blockchain infrastructure. Crucially, the plan involves repurposing underused coal power plants.
IMF Sounds Alarm
The IMF immediately questioned this massive power commitment. Reports confirm the Fund raised significant “red flags.” Significantly, Pakistan struggles with chronic electricity blackouts daily. Allocating 2,000 MW could power roughly 1.5 million homes instead. IMF officials demand urgent clarification from the Finance Ministry. They specifically question the legality of cryptocurrency mining within Pakistan. Presently, crypto activities remain illegal under existing law. Moreover, the IMF received no prior consultation about the initiative. This lack of communication troubles the Fund deeply. “The economic team faces stiff questions already,” revealed one negotiation official. “This move complicates talks further.” An IMF delegation currently holds virtual talks with Pakistan. They will schedule a special session solely for this power plan. The Fund worries about impacts on electricity tariffs for consumers.
Environmental Costs Cloud Mining Plan
Environmental concerns add another layer of criticism. Repurposing coal plants for Bitcoin mining carries a heavy cost. Experts estimate it could produce 4-5 million extra tons of CO₂ annually. Furthermore, this worsens Pakistan’s severe air pollution crisis. Air pollution already causes about 10,000 early deaths a year. Civil society groups strongly oppose prioritising Bitcoin over public health. Engineer Sana Zakir criticised proposed power subsidies for miners. “Blanket energy subsidies violate Pakistan’s IMF agreements,” Zakir stated.
Economic Stability and Loan Program at Risk
The IMF fears serious economic instability from this venture. Pakistan negotiates a crucial $1.5 billion loan program review next month. This Bitcoin plan threatens those delicate discussions. The Fund historically distrusts national crypto schemes. It repeatedly clashed with El Salvador over its Bitcoin holdings. Pakistan’s strategy risks becoming “El Salvador 2.0,” analysts warn. Bitcoin’s notorious price volatility heightens the financial danger. Holding Bitcoin reserves resembles risky brokerage tactics, economists argue. Furthermore, Pakistan contends with massive debt and fiscal pressures. Allocating precious resources to speculative mining seems reckless to critics. The proposed subsidised electricity rate is $0.09 per kWh. However, Pakistan’s high energy costs and weak grid make mining inefficient. Mining one Bitcoin here requires a massive 600,000 kWh. Globally, rates in places like Iceland (2-4 cents/kWh) are far cheaper. Therefore, the plan’s economic viability remains uncertain.
Government outlook
Despite mounting pressure, Pakistan’s government remains steady. Bilal bin Saqib champions the strategy as economic transformation. Authorities see crypto mining monetising underused power capacity. They also aim to tap a vast $300 billion informal economy. Tokenising assets like land could unlock enormous value. The PDAA and National Crypto Council drive regulatory efforts forward. Nevertheless, officials haven’t publicly addressed the IMF’s specific worries yet.
Global Eyes on Pakistan
The world watches Pakistan’s high-stakes crypto experiment unfold. Success could position Pakistan as South Asia’s digital finance leader. Failure, however, might trigger severe consequences. Resolving IMF concerns is absolutely critical for the loan program. The outcome sets a vital precedent for other indebted nations. Can Pakistan balance bold innovation with fiscal responsibility? The coming weeks will prove decisive for its economy and energy future.
Written By Fazal Ul Vahab C H
