based on materials from the site - By Coinpaper.com
Pakistan is striving for technological sovereignty. However, these ambitions face significant economic and political challenges, including a low standard of living and a protracted conflict with India, which controls the upper reaches of key rivers.
Pakistan, a country with a population of over 255 million people, is actively embracing digital technologies. In recent years, there has been a growing interest in cryptocurrencies and artificial intelligence. The youth, especially in large cities like Karachi and Lahore, are increasingly using blockchain applications and engaging in cryptocurrency trading.
This is not just a trend — for many, it is a way to protect themselves from financial instability. First of all, digital assets are an attractive tool for preserving and increasing capital amid high inflation of the Pakistani rupee. For the young, tech-savvy population, cryptocurrencies have also become a tool for cross-border transfers and earning.
However, not all Pakistanis can afford high-speed internet. According to forecasts for 2025, only 45.7% of the population will have stable network connectivity, and rural areas often remain completely outside coverage. This significantly slows down the mass adoption of digital currencies.
The situation with cryptocurrencies in Pakistan is a classic example of a conflict between the government and the population. Currently, digital assets are in a 'gray area'. In 2022, the authorities of Pakistan considered the possibility of banning cryptocurrencies and planned to block websites related to digital assets. At the same time, the State Bank announced the launch of a central bank digital currency (CBDC) by 2025.
Despite this, the country has one of the highest rates of digital asset adoption in the world. Thanks to the activity of retail investors, Pakistan will enter the top ten global leaders in adoption rates in 2024, according to Chainalysis data.
Analysts also forecast further rapid growth: it is expected that by the end of 2025, the number of cryptocurrency users in the country will exceed 27 million, and the industry's revenue will reach $1.6 billion.
In 2021, the province of Khyber Pakhtunkhwa announced plans to build state farms for the extraction of digital gold. The idea was to use cheap hydroelectric power to replenish the treasury.
This initiative was put on hold until 2025, when the head of the Cryptocurrency Council, Bilal bin Sakeb, announced plans to redirect excess electricity for Bitcoin mining and to power data centers for the artificial intelligence sector. Later, local media learned that the government of Pakistan would allocate 2 GW for these purposes.
The focus is on utilizing excess resources from renewable sources — hydro, wind, and solar energy. This is an example of a balanced ecological agenda without ludditism: the country is not afraid of technology but seeks to minimize harm to nature.
Shortly after this, Sakeb announced the creation of a national reserve of digital gold. These intentions, along with other steps the country is taking in the field of cryptocurrencies and artificial intelligence, raised concerns from the International Monetary Fund (IMF).
The World Wide Web in Pakistan is strictly regulated, but the methods differ from the Chinese ones. While the 'Great Firewall of China' is a complex, proactive content filtering system, Pakistan's approach is reactive and crude.
Pakistan's main vulnerability is access to water. The country critically depends on rivers originating in India or in Indian-administered Kashmir. This is a legacy of the partition of British India, which New Delhi uses as a powerful lever of pressure.
These relations are governed by the Indus Waters Treaty of 1960. According to it, Pakistan receives the flow of the 'western' rivers (Indus, Jhelum, Chenab), while India receives the flow of the 'eastern' rivers (Ravi, Beas, Sutlej). However, India has the right to build hydroelectric stations on 'Pakistani' rivers.
Another escalation of the conflict in Kashmir, which began in April 2025, again highlighted this vulnerability. In response to the escalation, India restricted the flow of water in the Chenab and Jhelum rivers, which Pakistan uses for agriculture and electricity production. Such actions allow India to exert direct economic pressure on its neighbors.
In this context, the development of technologies becomes a matter of survival. Artificial intelligence is already being used to optimize water consumption in agriculture, and the transition to alternative energy sources, including hydroelectric power generation, reduces critical dependence on rivers controlled by India.
The country will have to find a balance between ambitions and reality. If plans to create a Bitcoin reserve and mining are implemented, they could serve as an example for other developing countries. However, without addressing basic issues — from internet access to energy stability — such projects risk remaining on paper.
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