Pakistan's ambitious plan to attract cryptocurrency mining operations through subsidized electricity rates has faced a major setback after rejection by the International Monetary Fund (IMF). The decision comes amid concerns about the country's already strained power infrastructure and potential market distortions.
Key Developments in Pakistan's Crypto Mining Proposal
- Pakistan's Power Ministry Secretary informed the Senate Power Committee that IMF considers the subsidized electricity plan "potentially burdensome" for the nation's power system
- The government is now renegotiating power subsidy arrangements with international institutions
- Senate discussions also addressed technological solutions to combat electricity theft, with detailed responses requested from power authorities
Background: Pakistan's Crypto Mining Ambitions
In May 2025, Pakistan's government announced plans to allocate 2,000 megawatts of electricity specifically for:
- Cryptocurrency mining operations
- AI data centers
The initiative, supported by Pakistan's Crypto Board and the Finance Ministry, aimed to:
- Attract foreign investment
- Develop digital infrastructure
- Position Pakistan as a regional tech hub
IMF's Concerns About Crypto Mining Subsidies
The international financial body raised several critical issues:
⚠️ Pre-Implementation Communication Failure:
The plan was formulated without prior consultation with IMF
⚖️ Legal Uncertainty:
Questions remain about cryptocurrency mining's legal status in Pakistan
🔌 Grid Capacity Worries:
Pakistan's electricity infrastructure already operates under significant strain
💸 Market Distortion Risks:
Preferential rates could create unfair advantages in the energy market
Pakistan's Energy Challenges
The rejection comes as Pakistan grapples with:
- Chronic electricity shortages
- Aging power infrastructure
- High transmission losses
- Frequent power outages
The Senate Power Committee emphasized the need for comprehensive energy sector reforms alongside any crypto-related initiatives.
Frequently Asked Questions
Why did IMF reject Pakistan's crypto mining electricity plan?
IMF cited concerns about additional strain on Pakistan's power grid, potential market distortions, and lack of prior consultation about the subsidy plan.
How much electricity was Pakistan planning to allocate for crypto mining?
The proposal involved dedicating 2,000 megawatts for cryptocurrency mining and AI data centers.
Is cryptocurrency mining legal in Pakistan?
While the government showed support through this initiative, IMF highlighted unresolved questions about crypto mining's legal status in the country.
What happens next for Pakistan's crypto mining plans?
The government is renegotiating power subsidies with international institutions while continuing discussions about energy sector reforms.
👉 Learn more about global crypto regulations
👉 Understanding cryptocurrency mining economics
The path forward for Pakistan's crypto ambitions now appears contingent on resolving these fundamental energy and governance challenges while addressing international partners' concerns.