IMF Blocks Pakistan's Subsidized Power Plan for Bitcoin Mining Over Market Concerns

The International Monetary Fund (IMF) has rejected Pakistan's proposal to provide discounted electricity rates for Bitcoin mining operations and other energy-intensive industries, citing risks of market distortions, grid instability, and fiscal pressures. The plan remains under discussion as Pakistani authorities seek further consultation with international organizations, according to local reports.

During a Senate Standing Committee on Power meeting, Power Secretary Dr. Fakhray Alam Irfan confirmed the IMF's disapproval of the initiative. The global financial institution expressed concerns about the proposal's potential strain on Pakistan's power infrastructure and raised multiple objections regarding crypto mining's legal status in the country and its impact on the already overburdened electrical grid.

The IMF specifically warned about potential market disruptions and questioned the allocation of resources, including possible effects on electricity pricing. This follows Pakistan's May announcement to allocate 2,000MW of power for crypto mining and data centers as part of its foreign investment strategy, led by the Pakistan Crypto Council with Finance Ministry support.

Dr. Irfan noted that while the IMF initially rejected the proposal, the government continues negotiations to revise its power subsidy plan. The Senate committee also addressed electricity theft mitigation measures and recent banking sector interventions to reduce circular debt.

Previously, Pakistan Crypto Council CEO Bilal Bin Saqib revealed plans to utilize surplus electricity for Bitcoin mining and AI data centers, with locations to be determined by regional power availability. Notably, Binance founder Changpeng Zhao serves as strategic advisor to the Council, assisting with blockchain infrastructure and regulatory framework development despite his recent legal issues in the U.S.

Saqib highlighted Pakistan's significant crypto adoption, estimating 15-20 million users and ranking among the top 10 crypto-adopting nations globally. The power allocation plan forms part of Pakistan's broader digital infrastructure development strategy, aiming to convert excess electricity capacity into revenue streams and create advanced employment opportunities.