Pakistan wants to tap its surplus electricity to power Bitcoin mining. The goal? Create a national Bitcoin reserve and fuel its DeFi ambitions. But the IMF has rejected Pakistan’s plan to use subsidized electricity for crypto miners. It says such subsidies could harm Pakistan’s fragile energy market. Now, the plan sits under review by the World Bank and other lenders.
Pakistan’s Secretary of Power, Fakhray Alam Irfan, confirmed the IMF’s resistance. He said all major energy policies need IMF approval under current agreements. Pakistan had proposed a marginal-cost tariff for industries like Bitcoin mining to absorb excess power and attract foreign investment. However, the IMF warns it could create economic imbalances in Pakistan. For now, Pakistan’s crypto dreams remain stalled.
Pakistan’s Strategy: Bitcoin Mining for DeFi and Growth
Pakistan has a bigger vision behind its Bitcoin mining plans. It wants to build a Bitcoin reserve while expanding into DeFi yields. Bilal Bin Saqib from the Pakistan Crypto Council says the country plans to grow its Bitcoin holdings using DeFi protocols. This would give Pakistan a new digital asset layer while boosting its financial independence.
Earlier this year, Pakistan launched the Pakistan Digital Assets Authority (PDAA) to regulate crypto activities. It also announced plans to allocate 2,000 megawatts from the state grid for Bitcoin mining and AI centers. This move aims to drive tech employment and attract crypto investors. Saqib’s discussions with figures like Michael Saylor further fueled Pakistan’s push toward Bitcoin-led financial strategies. But without the IMF’s green light, Pakistan’s DeFi plans face delays.
IMF Pushback: A Major Setback for Pakistan’s Bitcoin Plans
The IMF’s stance could slow Pakistan’s plans to become a regional crypto hub. The IMF argues that subsidizing electricity for Bitcoin mining would strain the country’s resources. It also warns of potential legal and tariff complications. Pakistan, however, believes using runoff energy for Bitcoin mining is practical. The country has surplus power during winters, and it sees crypto as a tool for economic transformation.
The Pakistan Crypto Council and the Ministry of Finance argue that Bitcoin mining will help manage the surplus while earning foreign capital. They also see it as a way to strengthen Pakistan’s DeFi footprint. Yet the IMF remains cautious, pointing to past issues with targeted subsidies in Pakistan. This disagreement shows the challenges countries face when aligning crypto initiatives with global financial institutions.
What’s Next for Pakistan, Bitcoin Mining, and DeFi?
Despite the IMF’s rejection, Pakistan is not giving up. The proposal for Bitcoin mining using surplus electricity is still under discussion with the World Bank. The government is refining its plan to address the IMF’s concerns while pushing for crypto growth. It wants to balance its energy market while using Bitcoin mining to support its DeFi strategies.
The government’s crypto plans align with a wider push to digitize Pakistan’s economy. Using Bitcoin mining to build reserves and generate DeFi yields could add a new dimension to Pakistan’s financial landscape. But the path forward will require careful negotiation with the IMF. The coming months will reveal whether Pakistan can convince its partners and turn its Bitcoin mining and DeFi vision into reality.
