Pakistan's Crypto Push Stirs IMF Concerns Over Energy Strain

The International Monetary Fund (IMF) has raised significant concerns over Pakistan's plan to allocate 2,000 megawatts of electricity for cryptocurrency mining and artificial intelligence data centers. This move comes as Pakistan is in negotiations with the IMF for a new financial program. The IMF has expressed worries about the potential strain on Pakistan's already limited energy resources and the lack of a clear legal framework for cryptocurrency regulation in the country.

Pakistan has recently announced the establishment of a national Bitcoin reserve and digital wallet at the Bitcoin Vegas 2025 conference. The country aims to position itself as a hub for digital finance and technology, with major initiatives in the energy sector backing the expansion of digital assets. However, the IMF has quickly responded to this announcement, demanding details on how the crypto policy will be implemented and its legal basis. The IMF's concerns are heightened by Pakistan's current energy troubles and limited resources.

Reports indicate that the IMF was not involved in the preparation of Pakistan's new economic action plan, and there are no formal government policies in place for regulating cryptocurrency. The lack of a clear plan for setting electricity rates and distributing power has added to the IMF's worries. The IMF has informed Pakistan that any significant reforms under the Extended Fund Facility (EFF) must be agreed upon with the Fund, complicating the negotiations further. The IMF team is planning a separate session to discuss this topic with Pakistani officials.

Despite the controversy, Pakistan continues its digital shift. The Finance Ministry has approved the creation of the Pakistan Digital Asset Authority (PDAA), which will oversee crypto exchanges, wallets, stablecoins, and decentralized finance (DeFi) platforms. The PDAA will also oversee the tokenization of all public assets and government debt, aligning Pakistan's crypto practices with global standards and regulatory frameworks established by international bodies. Bilal bin Saqib, the crypto adviser to the Prime Minister, highlighted that the PDAA ensures investor protection and boosts nationwide digital access, inviting foreign investors to consider joining Pakistan’s digital growth.

However, the Finance Ministry has not officially addressed the IMF's concerns regarding the crypto policy. The government is proceeding with caution due to the unclear legal regulation of crypto assets in Pakistan. The IMF's demands for transparency and fiscal discipline are crucial as Pakistan navigates these challenges to secure continued support from international financial institutions. The government must focus on both new ideas and economic stability during its discussions with the IMF.