IMF Blocks Crypto Mining Subsidy Over Market Concerns
Pakistan’s ambition to leverage its surplus electricity for cryptocurrency mining has encountered a significant hurdle, with the International Monetary Fund (IMF) reportedly rejecting a proposal to offer subsidised power to energy-intensive sectors, including Bitcoin mining.
The plan, originally designed to boost demand and utilise excess electricity, was dismissed by the IMF over fears it could destabilise Pakistan’s already fragile energy market. According to Independent Urdu, Secretary of Power Fakhre Alam Irfan informed the Senate committee on energy that the IMF warned such subsidies could distort market dynamics and worsen structural issues within the power sector.
Surplus Electricity, But Stringent Conditions
Despite having excess power capacity—particularly during winter months—Pakistan is struggling to find avenues to make use of this energy in a financially sustainable manner. The Power Division’s plan, drafted in November 2024, proposed a marginal-cost tariff of 22–23 Pakistani rupees (approximately $0.08) per kilowatt-hour for industries such as copper smelting, data centres, and crypto mining.
Government officials argued that these incentives would help absorb surplus electricity and attract foreign investment. However, the IMF remains cautious, drawing parallels between this initiative and previous sector-specific tax breaks that have historically led to economic distortions in the country.
Plan Under Review, Not Abandoned
While the IMF has not endorsed the proposal, it hasn’t been completely shelved. Irfan confirmed that the plan is currently under review by the World Bank and other international partners. The Pakistani government is now working on refining the framework with input from these institutions.
Source: Bitcoin Archive
The IMF has significant influence over Pakistan’s economic policies due to the country’s ongoing reliance on international financial assistance. As a result, all major energy policy changes must receive approval from the IMF, limiting the government’s ability to implement unilateral reforms in this space.
Digital Ambitions: Bitcoin and AI Investment
Pakistan’s interest in crypto mining and artificial intelligence infrastructure is part of a broader digital transformation initiative led by the Pakistan Crypto Council, with support from the Ministry of Finance. In May 2025, the government allocated 2,000 megawatts of surplus electricity for Bitcoin mining and AI centres.
At the time, Finance Minister Muhammad Aurangzeb also announced tax incentives for AI-related ventures and duty exemptions for Bitcoin mining operations in an effort to attract international investors and position Pakistan as a digital economy hub.
The move came following the inaugural meeting of the Pakistan Crypto Council in March, where the idea of using runoff energy for Bitcoin mining was first presented by crypto advocate Saqib. The meeting saw participation from high-level stakeholders, including lawmakers, the Governor of the State Bank of Pakistan, the Chairman of the Securities and Exchange Commission, and the federal IT secretary.
Towards a National Bitcoin Reserve
Saqib has gone a step further by proposing the creation of a national Bitcoin reserve. Speaking at the Bitcoin 2025 conference, he revealed that discussions with MicroStrategy’s Michael Saylor had strengthened his resolve to pursue the initiative.
According to Saqib, Pakistan plans not only to hold Bitcoin but also to generate yield from it through decentralised finance (DeFi) protocols. This strategy, he claims, could help the country build digital assets and diversify its reserves, while tapping into emerging fintech innovations.
Outlook Remains Uncertain
The road ahead for Pakistan’s Bitcoin mining ambitions remains unclear. While the vision to utilise surplus electricity for digital ventures aligns with global technological trends, regulatory roadblocks and economic pressures pose major challenges.
As the government attempts to strike a balance between innovation and fiscal responsibility, much will depend on how international financial institutions respond to the revised proposals and whether a middle ground can be found.
Despite the setback from the IMF, the conversation around crypto adoption and digital asset management continues to grow in Pakistan. However, for such ambitious plans to materialise, long-term economic stability, transparent policy frameworks, and global cooperation will be essential.
