IMF Rejects Pakistan’s Proposal to Subsidize Power for Bitcoin Mining: Reports
Pakistan’s efforts to incentivize bitcoin mining and establish a bitcoin reserve have faced significant setbacks due to the International Monetary Fund’s (IMF) opposition. The IMF has consistently rejected the government’s proposals to provide subsidized electricity to energy-intensive industries, including bitcoin mining.
The initial plan, unveiled in September 2024, proposed allocating 2,000 megawatts of Pakistan’s electricity surplus to crypto mining at a heavily subsidized rate of 23-24 Pakistani rupees ($0.08) per kilowatt-hour (kWh). This six-month plan was later reduced to three months under pressure from the IMF. A subsequent, revised proposal also met with rejection.
The IMF’s concerns center on the potential for market distortions caused by such significant subsidies. The fund argues that these incentives, akin to tax holidays, often prove ineffective and undermine market efficiency. Furthermore, the IMF questioned the government’s strategy for transitioning the subsidized electricity back to market rates, citing past failures of similar initiatives. Despite these rejections, the Pakistani government continues negotiations with international institutions to refine its proposal.
Pakistan’s interest in promoting bitcoin stems from a desire to provide financial inclusion for its large unbanked population, estimated at 100 million people. The government envisions bitcoin and blockchain technology as tools to empower these individuals, enabling them to participate in saving and investment opportunities. This vision was highlighted by the Minister of State for Blockchain and Crypto, Bin Saqib, at the Bitcoin 2025 conference in Las Vegas. Saqib emphasized the potential for crypto to facilitate a significant leap in economic progress for Pakistan’s citizens.
The government’s ambitious plan, inspired by similar proposals in the U.S., includes the establishment of a strategic bitcoin reserve. However, the IMF’s persistent opposition presents a significant hurdle to the realization of this vision. The ongoing negotiations will determine the future of Pakistan’s bitcoin strategy and its ability to overcome the IMF’s concerns.
