Key Insights:
- IMF rejected Pakistan’s 2,000MW crypto mining plan over grid and legal concerns.
- Officials said the subsidy risked distorting tariffs and weakening reform credibility.
- Talks with financial institutions continue, but IMF remains unconvinced.
Pakistan’s plan to power Bitcoin mining with surplus electricity has been rejected by the IMF, which raised legal and infrastructure concerns, calling the proposal a distortion to power markets.
Crypto mining push hits IMF roadblock
Pakistan’s plan to allocate 2,000 megawatts of electricity for Bitcoin mining and artificial intelligence data centers has been blocked by the International Monetary Fund. The IMF rejected a proposal that would have granted subsidized energy rates to mining operations, citing concerns over grid strain and market distortions.
The decision came during a Senate Standing Committee on Power session, where Secretary of Power Dr. Fakhray Alam Irfan confirmed the IMF’s refusal. According to Irfan, the IMF warned that the subsidy resembled sector-specific tax holidays, which could create imbalances in an already fragile energy market.
Despite the rejection, Pakistan’s government appears unwilling to shelve the plan entirely. Local reports confirm that the administration is still in discussions with international financial institutions to rework the proposal.
Bitcoin ambitions meet structural constraints
The Power Division originally introduced the plan in Sept. 2024, proposing a six-month electricity package priced at marginal cost—Rs 23 per kilowatt-hour. The IMF approved a shorter three-month version instead, highlighting concerns about how the subsidy would distort energy markets.
By Nov. 2024, Pakistan pushed a revised version, targeting crypto mining and other high-consumption industries such as metal production. The IMF rejected this second attempt as well. Dr. Irfan told the committee the fund had flagged legal and infrastructure risks related to the country’s crypto strategy.
In May 2025, the Pakistan Crypto Council and Ministry of Finance jointly announced plans to power data centers and Bitcoin mining with surplus energy. The proposed 2,000MW allocation was meant to attract foreign investment. The IMF, however, responded with warnings about the legality of crypto mining in Pakistan and potential knock-on effects on existing tariff structures.
A tweet from @BTC_Archive summarized the backlash:
“JUST IN: 🇵🇰 IMF rejects Pakistan’s plan to allocate 2,000 megawatts of electricity for Bitcoin mining and AI data centres.”
Economic rebound faces credibility tests
The energy subsidy debate comes as Pakistan struggles to stabilize its economy under IMF supervision. In recent days, the country surpassed a key IMF target, raising foreign reserves to $14.5 billion. While this milestone suggests progress, critics warn that structural imbalances remain unresolved.
Mansoor Ahmed Qureshi noted the milestone in a post on X:
“Pakistan crosses another IMF milestone, foreign reserves rise above the $14B target.”
But former ambassador Husain Haqqani drew a sobering comparison, stating:
“India’s reserves ‘fell’ but are still $697.9 billion… Economic size matters.”
Amid those figures, the government’s aggressive energy plans appear out of sync with IMF priorities. Dr. Irfan acknowledged that the fund had not been consulted before the May announcement. The IMF, he said, views such energy allocations as premature and potentially damaging to macroeconomic reforms.
In addition, the government recently struck a deal with scheduled banks to reduce circular debt worth Rs 1.275 trillion. Senator Shibli Faraz criticized the agreement, claiming the banks were “forced at gunpoint.” He warned the debt burden would eventually be transferred to consumers through long-term surcharges.
Dr. Irfan clarified that no new taxes had been imposed. The existing Debt Servicing Surcharge of Rs 3.23 per unit would continue for five to six years.
Bitcoin Mining Plan Faces Political, Financial Resistance
The Senate committee instructed the Power Division to submit a revised strategy. The updated plan must address energy theft and specify how surplus electricity will be reallocated.
Dr. Irfan said 58% of users fall under the protected consumer category, paying just Rs 10 per unit. He noted that digital metering systems are being deployed to reduce power losses.
The Power Division maintained that using surplus energy for mining supports industrial modernization. But the IMF viewed the proposal as economically risky and structurally disruptive.
Though the IMF blocked the plan, Pakistan’s crypto strategy remains alive. Talks with other international lenders are ongoing. Government officials continue to promote Bitcoin mining as part of a long-term digital transformation effort.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
Moses K is a crypto journalist covering markets, regulation, and blockchain trends. He has written for The Coin Republic, Coinchapter, Cryptopolitan, Cryptotale, Coinspeaker, and MPost. Known for his concise, data-driven reporting, Moses focuses on price analysis, on-chain metrics, and policy developments shaping the global digital asset landscape.