Pakistan Allocates 2,000 Megawatts for Bitcoin Mining Amid IMF Concerns

Coin WorldSaturday, May 31, 2025 7:26 am ET
2min read

Pakistan is taking bold steps in the cryptocurrency sector, with the government planning to allocate 2,000 megawatts of electricity specifically for Bitcoin mining and AI data centers. This capacity is equivalent to that of two large power plants, highlighting the scale of the initiative. The move comes as the International Monetary Fund (IMF) seeks clarity from the Ministry of Finance regarding the legality of such projects, which could impact ongoing negotiations for a $3 billion loan package aimed at stabilizing Pakistan’s economy.

In addition to the electricity allocation, the Ministry of Finance has approved the establishment of the Pakistan Digital Assets Authority (PDAA). This regulatory body will operate within the framework of FATF standards, overseeing exchanges, stablecoins, and Decentralized Finance (DeFi) platforms. Prime Minister’s crypto advisor Bilal bin Saqib recently announced plans for a national Bitcoin strategic reserve during the Bitcoin 2025 conference. Earlier this year, a National Crypto Council was formed, demonstrating Pakistan’s commitment to embracing digital assets.

Pakistan's plan to allocate 2,000 megawatts of electricity for Bitcoin mining and AI data centers is part of a broader strategy to position the country as a leader in digital finance and innovation. This significant allocation underscores the government's commitment to leveraging advanced technology for national development. However, the IMF has expressed concerns over the potential financial stability risks and regulatory challenges associated with such a large-scale investment in Bitcoin mining. The IMF has previously warned countries about the dangers of adopting Bitcoin as a national reserve, citing issues related to financial stability, regulatory compliance, and monetary policy risks. Although the IMF has not formally responded to Pakistan's announcement, its previous objections could influence the next program review.

Despite the IMF's concerns, Pakistan is moving forward with its plans. The government has announced the creation of a national Bitcoin reserve and a national Bitcoin wallet to store these reserves safely. Officials have emphasized that these holdings are intended for long-term investment and will not be sold, indicating a strategic approach to digital asset management. This move is part of a larger effort to formalize the country's crypto sector, which has seen significant growth in recent years. Pakistan ranked ninth in the 2024 Global Crypto Adoption Index, driven primarily by high retail participation. With a population of 247 million, the number of crypto users in Pakistan is expected to surpass 27 million by 2025, highlighting the sector's rapid growth.

The IMF has also recently redefined how digital assets like Bitcoin are classified in global financial systems. The financial organization released a new edition of its Balance of Payments Manual (BPM7), which introduces detailed classifications for Bitcoin, stablecoins, and other digital assets. This move impacts how nations record crypto transactions and how these assets are taxed and regulated. The new manual categorizes Bitcoin and similar cryptocurrencies as non-produced non-financial assets, considering them capital assets like land, art, or intellectual property, rather than traditional money or financial investments. The IMF explained that Bitcoin’s role as a medium of exchange without liabilities sets it apart from government-backed money.

Pakistan's efforts to establish a Bitcoin reserve and allocate significant electricity for mining activities reflect its ambition to become a regional digital finance and innovation center. The government's commitment to using advanced technology for national development is evident in its strategic plans. However, the IMF's scrutiny and potential regulatory challenges could pose hurdles in the implementation of these plans. Despite these challenges, Pakistan's strong performance in the global crypto sector and its growing user base suggest that the country is well-positioned to become a major digital asset and AI hub.