Pakistan’s Bitcoin Hub Plans Hindered by IMF Subsidy Rejection

The International Monetary Fund (IMF) has declined Pakistan’s proposal to provide subsidized electricity to Bitcoin mining operations, which was a key component of the nation’s ambitious plans to establish itself as a regional crypto hub. This decision comes shortly after Pakistan made headlines with the announcement of its first strategic Bitcoin reserve.

During a Senate Standing Committee on Energy session on Thursday, Secretary of Power Dr. Fakhray Alam Irfan disclosed that the IMF had expressed concerns about the potential market distortions that such subsidies could create. The government had initially proposed to allocate 2,000 megawatts from its 7,000 MW electricity surplus to cryptocurrency mining and other energy-intensive industries at a subsidized rate of 23-24 Pakistani rupees ($0.08) per kilowatt-hour (kWh). However, the IMF remained unconvinced, citing historical precedents where similar tax holidays had undermined market efficiency.

“As of now, the IMF has not agreed,” Irfan stated, indicating that while the project is not entirely abandoned, it is currently under review by the World Bank and other international partners. The IMF has also raised concerns about the transition of subsidized electricity back to market rates and the potential failure of such initiatives to yield the desired results.

This development follows Pakistan’s recent establishment of a “National Crypto Council” aimed at creating a comprehensive regulatory framework for cryptocurrencies and attracting foreign investors. The council has appointed former Binance CEO Changpeng Zhao as a strategic advisor. Additionally, Pakistan has announced the creation of a strategic Bitcoin reserve, following the example set by the United States. During the Bitcoin 2025 conference in May, Pakistan Crypto Council CEO Bilal Bin Saqib emphasized the country’s commitment to pro-crypto regulatory policies and pledged that Pakistan would “never, ever sell” its Bitcoin holdings.

Despite these proactive steps, the specifics of Pakistan’s Bitcoin holdings, including the quantity and acquisition methods, remain undisclosed. The rejection of the electricity subsidy proposal by the IMF highlights the challenges Pakistan faces in balancing its ambitious crypto plans with economic prudence and international financial regulations.