The International Monetary Fund (IMF) has reportedly rejected Pakistan’s proposal to utilize excess power to offer cheaper electricity to the crypto mining sector, despite the country’s surplus energy capacity. Pakistan’s Crypto Mining Proposal Faces Uncertainty On Thursday, news outlet Independent Urdu reported that the IMF has rejected Pakistan’s proposal to subsidize electricity to certain industries, including the crypto mining and artificial intelligence (AI) sectors. In a statement before the Senate Standing Committee on Energy, Secretary of Power Fakhar Alam Irfan explained that all major energy sector initiatives must be cleared with the international financial institution, adding that the IMF raised concerns despite Pakistan’s surplus energy capacity. In November 2024, the Power Division proposed a marginal cost tariff of PKR 22-23, or around $0.80, per kilowatt-hour for specific industries with significant energy consumption, including the copper and aluminum smelting sectors, data centers, and crypto miners. The Division alleged that it would increase power demand and reduce the potential surplus capacity. Earlier this year, the recently established Pakistan Crypto Council (PCC) proposed utilizing surplus energy to support crypto mining operations and AI data centers in regions where excess electricity capacity is largest. The bid, led by the CEO of the PCC and the finance minister’s advisor, Bilal Bin Saqib, aims to convert unused electricity into a productive resource. Nonetheless, the IMF questioned Pakistan’s plan a month ago, seeking urgent clarification from the finance minister on the power allocation. According to the Thursday report, Irfan stated that the IMF is wary of any pricing mechanism that could destabilize the market, lead to potential economic imbalances, and create “new complications in the already strained power sector.” The international financial institution reportedly argued that Pakistan’s energy plan resembles sector-specific tax breaks that have historically created market imbalances. Additionally, the Senate Standing Committee on Energy expressed discontent over the absence of the Federal Power Minister during the meeting. Multiple senators raised concerns about the “forced” load shedding in the Tharparkar, Matiari, and Umerkot areas, where daily shutdowns continue for up to 14 hours despite consumers paying their bills. A New Era For Digital Assets Irfan affirmed that the government has not withdrawn the proposal, despite the IMF’s negative, adding that it is currently in consultation with international institutions, including the World Bank and other development agencies, to improve it. This follows the country’s efforts to position itself as a crypto hub. In May, the PCC CEO announced the creation of a national Strategic Bitcoin Reserve using existing BTC held by the federal government. He also revealed the establishment of a national Bitcoin wallet to hold cryptocurrencies under the state’s custody, intended to reflect the country’s long-term commitment to the growing industry. Notably, Saqib has previously stated that the election of pro-crypto US President Donald Trump motivated the government to develop the blockchain and digital assets industry, which has been largely unregulated, despite its adoption rate. Pakistan is “done sitting on the sidelines,” he has affirmed, expressing his desire to make the country one of the leaders of blockchain-powered finance.
