IMF Rejects Pakistan's 2,000 Megawatt Crypto Mining Plan

The International Monetary Fund (IMF) has rejected Pakistan's proposal to allocate 2,000 megawatts of subsidized electricity for crypto mining operations. This decision comes as a setback to Pakistan's broader strategy, which included plans to power Bitcoin mining and AI data centers with surplus electricity. The Pakistan Digital Assets Authority (PDAA) had been tasked with regulating the sector, aiming to stimulate interest in the region's mining potential.

The IMF's rejection is based on concerns over the economic and environmental implications of subsidizing electricity for energy-intensive activities like crypto mining. The fund has been cautious about Pakistan's fiscal stability and the potential strain on its power infrastructure. The IMF's stance underscores its commitment to ensuring that Pakistan's economic policies are sustainable and do not compromise its long-term financial health.

Pakistan's proposal was part of a larger initiative to leverage its surplus electricity for high-tech industries. The plan involved allocating 2,000 megawatts specifically for Bitcoin mining and AI data centers, with the PDAA overseeing the regulatory framework. This move was seen as a strategic step to attract investment and foster technological advancements in the region. However, the IMF's rejection highlights the need for a balanced approach that considers both economic growth and environmental sustainability.

The IMF's decision is likely to prompt Pakistan to reassess its energy policies and explore alternative strategies for economic development. The rejection serves as a reminder of the challenges faced by developing economies in balancing the need for technological advancement with fiscal responsibility. As Pakistan navigates these complexities, it will be crucial for the government to engage in dialogue with international financial institutions to find a sustainable path forward.

In a session with the Senate Standing Committee on Power, chaired by Senator Mohsin Aziz, the ongoing discussions with the IMF on crypto mining were outlined. IMF cited concerns about market distortions before rejecting the proposal to offer subsidized rates to energy-intensive industries such as crypto mining, data centres, and metal industries. Pakistan’s plan to allocate 2,000 megawatts for crypto mining, aiming at interest foreign investments, has now been rejected by the IMF. “As of now, the IMF has not agreed,” said Secretary Irfan. However, ongoing discussions suggest that Pakistan is committed to refining its energy plan to align with global standards and recommendations.

Dr. Irfan confirmed that the government is still in talks with international institutions to redefine its power subsidiary plan after the IMF rejected the proposal. The committee also discussed the technological solutions aimed at combating electricity theft. The Secretary Power added that 58% of users pay a subsidized rate of Rs. 10 per unit, which is a lot less than the government standard price. The government is planning to allocate Rs. 250 billion in subsidies this year and expand anti-theft technology in the country. The committee has directed the power division to submit a comprehensive answer to various issues at the next meeting.