Pakistan's Crypto Adoption Surges 27 Million Users Expected by 2025

Pakistan, with a population exceeding 255 million, is actively embracing digital technologies, particularly cryptocurrencies and artificial intelligence. Young people in major cities like Karachi and Lahore are increasingly using blockchain applications and engaging in cryptocurrency trading. This trend is driven by the need to protect against financial instability and high inflation of the Pakistani rupee. Cryptocurrencies serve as a tool for preserving and growing capital, as well as for cross-border transfers and earning money. However, the mass adoption of digital currencies is hindered by the lack of high-speed internet access, with only 45.7% of the population projected to have a stable connection by 2025, and rural areas often left out of coverage.

The situation with cryptocurrencies in Pakistan is complex. Digital assets are currently in a gray area, with the government considering banning them in 2022 and planning to block related websites. Simultaneously, the State Bank announced the launch of a central bank digital currency (CBDC) by 2025. Despite these regulatory uncertainties, Pakistan has one of the highest adoption rates of digital assets globally, ranking among the top ten in 2024. Analysts predict further rapid growth, with the number of crypto users expected to exceed 27 million by the end of 2025 and industry revenue reaching $1.6 billion.

In 2021, the Khyber Pakhtunkhwa province announced plans to build state-owned farms for mining digital gold using cheap hydropower. This initiative stalled until 2025, when the head of the Cryptocurrency Board, Bilal bin Saqib, announced plans to divert surplus electricity to bitcoin mining and power data centers for the artificial intelligence sector. The Pakistani government plans to allocate 2 GW for these purposes, focusing on utilizing surplus resources from renewable sources such as hydro, wind, and solar energy. This approach aims to balance technological advancement with environmental sustainability. However, the practical implementation of these initiatives requires a clear legal framework, which has not yet been developed in the country.

Pakistan's technological leap would not have been possible without China. Beijing is Islamabad's main partner, and their cooperation extends beyond politics, embedded in the China-Pakistan Economic Corridor (CPEC) megaproject. Key areas of support include infrastructure, where Chinese companies are actively involved in laying fiber optic cables, such as the PEACE undersea cable project. Additionally, China is helping to implement Safe City systems in major cities, which include comprehensive platforms with AI algorithms for facial recognition and behavioral analysis. Chinese giants Huawei and ZTE are the main contractors in testing and deploying fifth-generation networks in Pakistan. For China, a technologically advanced and stable Pakistan is a security guarantee for its CPEC investment and a key node in the "One Belt, One Road" initiative.

The internet in Pakistan is tightly regulated, but the methods differ from China's. While China uses a sophisticated, proactive content filtering system, Pakistan's approach is reactive and crude. The main regulator is the Pakistan Telecommunication Authority (PTA), which uses platform blocking, shutdowns, and throttling to control internet access. These techniques directly damage the digital economy, but authorities believe they are justified to maintain control. During political protests or unrest, the government routinely shuts down mobile internet across the country or in specific regions to combat the coordination of protesters.

Pakistan's main vulnerability is access to water, as the country is critically dependent on rivers originating in Indian territory or in Indian-controlled Kashmir. The relationship is governed by the Indus Waters Treaty of 1960, which grants Pakistan the flow of "western" rivers and India the flow of "eastern" rivers. However, India has the right to build hydropower plants on "Pakistani" rivers, allowing it to exert direct economic pressure on its neighbors. In response to the escalation of the Kashmir conflict in April 2025, India restricted the flow of water in the Chenab and Jhelam rivers, highlighting Pakistan's vulnerability. In this context, technology development becomes a matter of survival, with artificial intelligence being used to optimize water consumption in agriculture and the shift to alternative energy sources reducing critical dependence on rivers controlled by India.

To understand whether Pakistan's plans for digitalization and cryptocurrencies are realistic, it's worth looking at economic indicators. The average income in the country is $1,824 per year, an extremely low level by global standards. This figure explains why the population is fleeing to cryptocurrencies out of poverty, why the government cannot finance its own IT projects, and why the country is so heavily dependent on Chinese loans and technology. Talk of building sophisticated AI ecosystems or buying bitcoin for government reserves seems disconnected from reality, where basic needs for millions of people remain unmet. Pakistan is at a crossroads, with huge human capital, interest in digital finance, and support from China on one hand, and chaotic regulation, poverty, and constant conflicts with India on the other. The country will have to find a balance between ambition and reality. If plans for a bitcoin reserve and mining come to fruition, it could set an example for other developing countries. But without addressing basic problems—from internet access to energy stability—such projects run the risk of remaining on paper. This path is fraught with risks, from digital authoritarianism to economic isolation in case of failure. But for the country, such a technological leap could be a chance for a better future.