IMF Rejects Pakistan’s Plan to Subsidize Power for Crypto Mining, Citing Energy Market Risks
July 3, 2025 – Islamabad
Pakistan’s innovative proposal to leverage surplus electricity for cryptocurrency mining has encountered a significant obstacle as the International Monetary Fund (IMF) reportedly rejected the government’s plan to subsidize power rates for energy-intensive sectors, including Bitcoin mining.
Background: The Proposal to Boost Energy Utilization
In November 2024, Pakistan’s Power Division introduced a scheme aiming to offer a marginal-cost electricity tariff of 22 to 23 Pakistani rupees (approximately $0.08) per kilowatt-hour to industries such as copper smelting, data centers, and cryptocurrency mining operations. This initiative was designed to stimulate electricity demand and efficiently absorb the country’s surplus energy capacity, particularly abundant during the winter months.
The plan formed part of a broader digital transformation agenda championed by the Pakistan Crypto Council and supported by the Ministry of Finance. Earlier this year, the government earmarked 2,000 megawatts of surplus electricity specifically for Bitcoin mining and artificial intelligence centers, coupling this with enticing tax incentives and duty exemptions to attract investments in these emerging sectors.
IMF’s Concerns and Rejection
However, Pakistan’s Secretary of Power, Fakhre Alam Irfan, informed the Senate’s energy committee that the IMF had expressed serious reservations. The IMF cautioned that subsidized power pricing targeted at specific sectors could disrupt market equilibrium and aggravate vulnerabilities in Pakistan’s already fragile energy ecosystem.
According to a report by the Urdu-language news outlet Independent Urdu, the IMF likened such targeted subsidies to sector-specific tax breaks, which have historically led to economic distortions and imbalances within Pakistan’s economy. The international body underscored the necessity for all major energy policies to undergo its scrutiny and approval, highlighting concerns about unintended consequences on the energy market.
Despite this setback, Irfan emphasized that the proposal is not completely discarded. It remains under review by the World Bank and other key international stakeholders. The government is actively engaging with these partners to refine the plan and seek a viable solution that aligns with both Pakistan’s energy ambitions and fiscal prudence.
Ongoing Efforts to Capitalize on Crypto and AI
The cryptocurrency mining plan had gained momentum following discussions at the Pakistan Crypto Council’s inaugural meeting in March 2025. This high-profile gathering included lawmakers, the Governor of the Bank of Pakistan, the chairman of the Securities and Exchange Commission of Pakistan, and the federal IT secretary, all endorsing the exploration of Pakistan’s hydropower potential to fuel Bitcoin mining.
Additionally, Saqib, a prominent proponent of the initiative, unveiled intentions to establish a national Bitcoin reserve, highlighting his collaboration with Michael Saylor from Strategy — a leading advocate for cryptocurrency adoption. Saqib also revealed plans to increase Pakistan’s Bitcoin holdings through yield strategies in decentralized finance (DeFi) protocols, signaling the country’s ambition to become a pivotal player in the digital asset economy.
Broader Implications
Pakistan’s approach reflects an emerging trend among nations seeking to integrate cryptocurrency mining with renewable energy sources to create economic opportunities. However, the IMF’s intervention illustrates the delicate balance required between encouraging innovations and maintaining energy sector stability, especially in countries wrestling with supply constraints and fiscal challenges.
As Pakistan continues to negotiate with international financial institutions, the crypto mining power subsidy proposal remains in flux. The outcome will be closely watched by stakeholders eager to see how the country navigates these complexities to harness technological advancement while safeguarding economic stability.
Cointelegraph reached out to the IMF for comments on the matter but did not receive a response before publication.
Related:
- Can Bitcoin Fix Pakistan’s Energy Problem? The 2,000 Megawatt Mining Strategy Explained
- Pakistan Eyes DeFi Yields to Grow Bitcoin Reserve
- Strategy’s Michael Saylor to Help Pakistan With Crypto Pivot
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