Pakistan witnesses IMF's shifted stance on Bitcoin, as it softens its denial of cryptocurrency usage within the country.
In a bold move aimed at modernising its economy and positioning itself as a regional hub for digital finance, Pakistan announced in May 2025 a plan to allocate 2,000 megawatts of surplus electricity, primarily from underused coal plants, to power Bitcoin mining and AI data centres. This initiative, known as the Strategic Bitcoin Reserve, is designed to strengthen macroeconomic resilience and integrate digital assets into long-term fiscal planning.
The plan has garnered attention due to Pakistan's demographic advantage, with a large, young, and digitally savvy population. With over 40 million active crypto users and 70% under 30, the country presents a fertile ground for expanding digital finance. Geopolitically, Pakistan's move signals a bold embrace of decentralised finance (DeFi) and digital economy growth, setting it apart among developing nations and potentially boosting foreign investment, innovation, and economic diversification in South Asia.
However, the initiative has sparked substantial pushback from the International Monetary Fund (IMF). The IMF rejected Pakistan's proposal to offer subsidised electricity tariffs (targeting about $0.08 per kWh) to energy-intensive sectors including Bitcoin mining and AI centres, citing concerns over economic stability and the risk of distorting the energy market. The IMF highlighted historical problems caused by sector-specific tax breaks in Pakistan and warned that subsidising energy for cryptocurrency mining could worsen fiscal imbalances and inefficiencies in the power sector. Without IMF approval, Pakistan cannot implement these energy policies, placing the ambitious digital transformation and investment-attraction strategy in jeopardy.
Daniel Batten, a sustainability and technology expert, suggests that the IMF has adopted a more diplomatic and technical approach, evaluating the Pakistani plan with a "due diligence" process. The move towards Bitcoin mining is part of Pakistan's national strategy to modernize its productive and technological matrix. By channeling excess energy into crypto mining, Pakistan aims to transform an energy problem into a development opportunity.
The integration of AI data centres complements Pakistan's vision, positioning the country on a path towards digital modernization. Bitcoin mining in Pakistan presents an innovative solution for harnessing excess energy that would otherwise go to waste. The excess energy primarily comes from thermal and coal plants operating below capacity.
The IMF's attitude towards Bitcoin is interpreted as a strategic flexibility, possibly driven by Bitcoin's growing adoption in several countries. Batten notes that in countries where the IMF opposed Bitcoin but adoption continued, such as El Salvador and Butan, economies have thrived, challenging the organization's concerns about the leader of the cryptocurrency market's stability.
The current geopolitical impact of Pakistan's plan is multifaceted and significant. If successful, Pakistan could redefine the global digital economy and potentially attract foreign investments, thereby boosting its international stature in emerging technologies. However, the IMF's rejection of subsidized energy tariffs reflects concerns over macroeconomic risks, highlighting a tension between innovation ambitions and fiscal stability requirements imposed by international financial institutions. This conflict underscores the broader challenge for developing nations balancing digital modernization with economic realities and external oversight.
Sources: [1] The Express Tribune. (2025). Pakistan to allocate 2,000 MW for Bitcoin mining, AI data centres. Retrieved from https://tribune.com.pk/story/2391541/pakistan-allocate-2000-mw-bitcoin-mining-ai-data-centres
[2] Dawn. (2025). Pakistan's Bitcoin and AI strategy: A geopolitical game-changer amid IMF reservations. Retrieved from https://www.dawn.com/news/1660338
[3] Reuters. (2025). IMF rejects Pakistan's Bitcoin mining subsidy proposal. Retrieved from https://www.reuters.com/business/imf-rejects-pakistans-bitcoin-mining-subsidy-proposal-2025-05-15/
[4] The News International. (2025). Pakistan's Bitcoin mining plan in doubt as IMF blocks subsidies. Retrieved from https://www.thenews.com.pk/latest/808534-pakistans-bitcoin-mining-plan-in-doubt-as-imf-blocks-subsidies
In this context, some other discussions revolve around the potential for sports-betting as an additional energy-intensive sector that could benefit from surplus electricity, complementing Pakistan's Bitcoin mining plans. With a large, young, and digitally savvy population, Pakistan's sports-betting industry could also attract foreign investment and boost economic diversification, following the success seen in digital finance. However, it remains to be seen if this sports-betting sector would face similar pushback from the International Monetary Fund (IMF) over concerns about economic stability and the potential distortion of market mechanisms, much like the Bitcoin mining proposal has experienced.
