tl;dr
The IMF denied vetoing Pakistan’s plan to use surplus electricity for crypto mining, clarifying ongoing negotiations and sufficient power availability. The World Bank and other partners are involved in discussions, with the IMF concerned about economic imbalances from sector-specific tax breaks, adv...
The International Monetary Fund (IMF) has denied claims that it vetoed Pakistan’s plan to use surplus electricity for block reward mining. Earlier reports suggested the IMF questioned the legality and impact of allocating at least 2,000 MW of surplus power to crypto mining, leading to rumors that the initiative might be dropped. However, Pakistan’s Power Division clarified that negotiations with the IMF are ongoing, and there is sufficient electricity to support mining and other data centers.
The dispute has drawn interest from the World Bank and other development partners, who are now part of the discussions. The IMF confirmed it is engaged in technical talks with Pakistani authorities about the IT sector plans but emphasized concerns over creating economic imbalances through sector-specific tax breaks. The IMF advocates for a level playing field across private sectors as deliberations continue.
In regulatory news, Pakistan approved the establishment of the Pakistan Virtual Assets Regulatory Authority (PVARA), designed to oversee licensing, supervision of Virtual Asset Service Providers (VASPs), technical standards, and compliance with international guidelines from FATF, IMF, and World Bank. This new authority replaces a fragmented regulatory landscape that previously involved up to four different agencies. The move follows the recent formation of the Pakistan Crypto Council, which supports digital asset regulation and adoption.
On the digital payments front, Prime Minister Shehbaz Sharif aims to accelerate Pakistan’s digital economy by raising mobile money users from 95 million to 120 million and doubling merchants who accept QR code payments to 2 million. Despite these ambitious goals, the Prime Minister believes the targets need to be more aggressive to foster transparency and convenience in transactions. Pakistan continues to trail behind regional neighbors like India, where the Unified Payments Interface (UPI) processes billions of digital transactions monthly, highlighting the potential for growth in Pakistan’s market.