Pakistan’s Bitcoin Mining Plan Partially Rejected by IMF

Pakistan’s ambitious plan to optimize its energy sector through Bitcoin mining has been met with a partial rejection from the International Monetary Fund (IMF). The IMF has declined to fully endorse the proposal for a subsidized electricity tariff aimed at powering Bitcoin mining operations. Instead, the IMF approved only a three-month relief period, down from the proposed six months. This decision was made due to concerns over market distortion and the potential strain on Pakistan’s already burdened energy sector.

The IMF’s partial rejection underscores its broader skepticism toward national-level crypto adoption. Similar warnings have been issued to other countries, including El Salvador, where the IMF has cautioned against direct government involvement in Bitcoin mining and accumulation. The global financial regulator has also questioned Pakistan’s energy plans, particularly those related to emerging sectors like Bitcoin mining and AI infrastructure.

Despite the IMF’s reservations, Pakistan appears to be doubling down on its crypto push. The government has signaled a broader commitment to digital assets, framing Bitcoin as a sovereign-grade financial tool that could help strengthen financial decentralization and innovation in the Global South. Pakistan is building a high-profile advisory group for its newly formed Crypto Council as part of this strategy. The team includes Michael Saylor of MicroStrategy, the founder of Binance, and Bin Saqib, a World Liberty Financial advisor. These appointments reflect Pakistan’s ambition to shape global crypto discourse and policy.

In a related development, World Liberty Financial, a DeFi project with ties to former US President Donald Trump and his family, signed a memorandum of understanding with the Pakistani Crypto Council in late June. This move further solidifies Pakistan’s commitment to integrating digital assets into its financial strategy.

The government’s plan includes repurposing three underutilized coal plants to power crypto mining operations and data centers. This approach has raised questions about national energy priorities and potential impacts on tariffs. The IMF’s concerns highlight the delicate balance Pakistan must strike between leveraging new technologies and maintaining economic stability.

Pakistan’s energy optimization via Bitcoin mining is set for a three-month trial period, during which the government will assess the feasibility and impact of this initiative. The trial period will provide valuable insights into whether Bitcoin mining can be a sustainable and beneficial addition to Pakistan’s energy sector, or if it poses significant risks that need to be mitigated.