tl;dr
Pakistan plans to allocate 2,000 MW of electricity from underutilized coal plants for Bitcoin mining and AI data centers to become a global digital finance hub. Led by Bilal Bin Saqib, the initiative aims to use surplus energy and attract crypto and AI firms, supported by subsidized electricity rate...
Pakistan has unveiled an ambitious plan to allocate 2,000 megawatts (MW) of electricity from underutilized coal plants to power Bitcoin mining and artificial intelligence (AI) data centers, aiming to transform itself into a global hub for digital finance. Led by Bilal Bin Saqib, CEO of the Pakistan Crypto Council and Special Assistant to the Prime Minister for Crypto and Blockchain, this initiative seeks to leverage surplus energy capacity while attracting crypto and AI businesses through subsidized electricity rates.
However, the International Monetary Fund (IMF) has expressed serious concerns regarding the plan’s legality, sustainability, and the potential strain it could place on Pakistan’s already stressed energy grid. These concerns come amid ongoing bailout negotiations, with the IMF questioning whether diverting 2,000 MW to mining operations might exacerbate energy shortages and undermine economic stability during a fragile period.
The electricity to be used comes from coal-powered plants operating at around 15% capacity, which Pakistan views as surplus energy resulting from infrastructure investments and reduced industrial activity. To incentivize crypto miners, Pakistan proposes subsidized electricity rates near $0.09 per kWh, noticeably lower than the country's typical industrial rates, but this move has sparked criticism. Economists worry about the preferential treatment for miners in a country where residential and industrial consumers face much higher energy prices and frequent outages, fueling public discontent.
Adding to the complexity, Pakistan currently prohibits domestic cryptocurrency use, creating a regulatory contradiction with its goal to become a global crypto investment destination. Furthermore, the country’s inclusion on the Financial Action Task Force’s grey list for money laundering risks complicates regulatory frameworks needed to support this vision. The IMF’s scrutiny highlights concerns that uncoordinated crypto initiatives could destabilize ongoing financial reforms and lack clarity on sustainable energy use.
Despite these challenges, Pakistan benefits from a youthful, digitally engaged population and untapped renewable energy potential, with only 7% of the power mix currently from renewables. This demographic and resource base offers a promising foundation for fostering digital innovation and could help Pakistan emerge as a mining hub if infrastructure and regulation improve. The initiative also aims to introduce a national Bitcoin wallet to manage seized digital assets as a “sovereign reserve,” signaling long-term confidence in the digital economy without risking taxpayer funds.
Pakistan’s mining and AI data center plan serves as a high-stakes test of balancing technological ambition with economic and energy realities. Success may encourage other developing nations to embrace crypto mining and digital finance, while failure could validate IMF caution regarding digital asset policies without strong oversight. As Pakistan negotiates this grand gamble, its outcome will likely influence the global narrative surrounding the adoption of cryptocurrency in emerging markets.