The International Monetary Fund (IMF) has unequivocally turned down Pakistan’s proposals to subsidize electricity for bitcoin mining, citing concerns over market distortions. This decision was announced during a session with the Senate Standing Committee on Power last Thursday, where Secretary of Power Dr. Fakhray Alam Irfan disclosed the IMF’s apprehensions.
A Power Struggle
Pakistan had ambitious plans to allocate 2,000 megawatts from its 7,000 MW electricity surplus to crypto mining, offering it at a discounted rate of 23-24 Pakistani Rupee per kilowatt-hour—roughly $0.08. However, the IMF raised eyebrows, drawing parallels between these subsidies and tax holidays that often skew market dynamics. This follows a pattern of institutional adoption, which we detailed in our analysis of corporate treasury investments.
“The IMF is worried about the broader implications of such concessions,” Dr. Irfan noted, emphasizing the IMF’s skepticism about transitioning back to market rates without causing disruptions. According to the IMF, similar efforts in the past haven’t yielded the intended economic benefits, as they often fail to attract sustainable investments.
The Bitcoin Bet
Pakistan’s government has been making headlines with its bold crypto initiatives. Just two months ago, in May, it unveiled plans to establish a strategic bitcoin reserve, inspired by the U.S. administration’s crypto-friendly policies. Minister of State for Blockchain and Crypto, Bin Saqib, has been vocal about the potential of blockchain technology to empower the country’s unbanked population—a staggering 100 million people.
“We want them to break their economic classes,” Saqib stated passionately at the Bitcoin 2025 conference in Las Vegas. “And I really believe that crypto and blockchain can help us take that quantum leap.”
The IMF’s Concerns
Here’s the catch: the IMF insists that without a proper strategy to return to market pricing, these subsidies could backfire. The initial proposal, floated in September 2024, was meant to be a six-month marginal cost tariff package. Under IMF pressure, it was curtailed to just three months. A follow-up targeted subsidy proposal in November also hit a wall.
“Transitioning from subsidized to market rates isn’t as straightforward as flipping a switch,” warned an analyst familiar with the situation. “It requires a delicate balance and a robust exit strategy.”
Looking Ahead
Dr. Irfan mentioned that the government is still in talks with international organizations to refine the plan. Despite the setbacks, Pakistan remains committed to exploring cryptocurrency’s potential benefits, though the road ahead appears fraught with challenges. As explored in our recent coverage of Bitcoin’s mining difficulty adjustments, the global interest in crypto mining continues to grow, with various countries exploring different strategies.
The IMF’s rejection serves as a stark reminder of the complexities involved in integrating such disruptive technologies into traditional economic frameworks. As Pakistan navigates this intricate landscape, questions linger: Can the country reconcile its crypto ambitions with fiscal prudence? And will these efforts ultimately translate into tangible economic growth?
As the world watches closely, Pakistan’s journey into the crypto realm might just be a harbinger of broader shifts in global financial strategies—a narrative that promises to unfold with unexpected turns and intriguing developments.
Source
This article is based on: IMF Rejects Pakistan’s Proposal to Subsidize Power for Bitcoin Mining: Reports
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
