Pakistan’s plan to use surplus electricity for crypto mining has hit a roadblock after the International Monetary Fund (IMF) reportedly rejected a proposal to offer subsidized power to energy-intensive industries, including Bitcoin miners.
Pakistan’s Secretary of Power Fakhre Alam Irfan told the Senate committee on energy that the IMF claimed such measures could distort the energy market and worsen existing issues in the country’s fragile power sector, according to a report from Urdu-language news outlet Independent Urdu.
Although Pakistan has excess electricity, particularly during winter, the IMF remains concerned that pricing schemes could disrupt the market balance, per the report. Irfan said all significant energy policies must be approved by the IMF.
The Power Division’s November 2024 plan proposed a marginal-cost tariff of 22–23 Pakistani rupees (about $0.08) per kilowatt-hour for industries like copper smelting, data centers, and crypto mining. Officials argued the scheme would boost electricity demand and help absorb surplus capacity.
Related: Strategy’s Michael Saylor to help Pakistan with crypto pivot
IMF cites risk of economic imbalances
The IMF reportedly dismissed the plan, comparing it to sector-specific tax breaks that have historically created economic imbalances in Pakistan, the report said.
Irfan noted that the proposal hasn’t been shelved entirely and is under review by the World Bank and other international partners. He said that the government is working on refining the plan with input from these institutions.
Cointelegraph reached out to the IMF for comment but had not received a response by publication.
In May, Pakistan earmarked 2,000 megawatts of surplus electricity for Bitcoin (BTC) mining and AI centers as part of a digital transformation initiative led by the Pakistan Crypto Council and supported by the Ministry of Finance.
At the time, Finance Minister Muhammad Aurangzeb announced tax incentives for AI centers and duty exemptions for Bitcoin miners to attract investors.
Saqib first proposed using the country’s runoff energy to fuel Bitcoin mining at the Crypto Council’s inaugural meeting back in March. The meeting included lawmakers, the Bank of Pakistan’s governor, the chairman of Pakistan’s Securities and Exchange Commission and the federal information technology secretary.
Related: Can Bitcoin fix Pakistan’s energy problem? The 2,000 megawatt mining strategy explained
Pakistan eyes DeFi yields to grow Bitcoin reserve
Saqib announced plans for a national Bitcoin reserve during the Bitcoin 2025 conference, revealing that a discussion with Strategy’s Michael Saylor reaffirmed his conviction in the move.
Saqib has also said the country intends to expand its Bitcoin holdings using yield generated through decentralized finance protocols.
Magazine: Bitcoin vs stablecoins showdown looms as GENIUS Act nears
Read the full article here
