Pakistan’s federal government has suffered a setback in its crypto plans as it failed to get approval for its Bitcoin mining plans from the IMF. According to media reports, the IMF has concerns regarding instability surrounding the country’s energy sector.
The proposal involved using 2000 MW of Pakistan’s electricity provided at subsidy rates for Bitcoin mining, with the country having a surplus of 7000 MW.
Pakistan has been dealing with a years-long energy crisis, with the largest power outage in recent years happening in 2023, which saw 220 million people without electricity.
The IMF has said that providing electricity at cheaper rates in an effort to boost industry did not lead to better outcomes based on past history.
IMF’s staff visit to Pakistan on May 19—led by Nathan Porter, Assistant Director, Mission Chief to Pakistan—discussed energy sector reforms, particularly aimed at reducing the country’s high costs connected to its energy sector.
Alongside seeking IMF funding, the country’s finance ministry is also looking to secure a trade deal with the U.S., which has created a strategic cryptocurrency reserve.
Pakistan’s efforts to bolster its crypto industry have picked up in previous months. Notable developments include the creation of the Pakistan Crypto Council, partnering with Changpeng Zhao for advisory purposes, and the partnership with the Trump-owned World Liberty Financial, whose investments are primarily focused on crypto.
Bitcoin mining has been brought into focus as a possible key driver of power outages before, particularly in Iran.
Iran’s subsidized electricity made mining lucrative in the region, attracting both legal and illegal ventures. Power outages in 2024 occurred during the country’s hottest summer in 50 months, with officials blaming cryptocurrency mining as the main reason for the outages. The government offered bounties to residents who reported instances of illegal mining operations.