The International Monetary Fund (IMF) has raised serious concerns about Pakistan’s decision to allocate 2,000 megawatts (MW) of electricity for Bitcoin mining and AI data centers, amid ongoing negotiations tied to the country’s extended financial support program.
Power Plan Faces Scrutiny Amid Energy Crisis
Announced last week, Pakistan’s plan aims to attract blockchain companies, autonomous crypto miners, and AI firms to set up operations in the country. Officials have touted the initiative as a way to boost technological investment and diversify the economy.
However, the IMF has reportedly expressed alarm over the plan, particularly in light of Pakistan’s chronic energy shortages, fiscal instability, and strained infrastructure.
According to local media outlet Samaa, the IMF has formally requested urgent clarification from Pakistan’s Finance Ministry regarding the legal framework surrounding crypto mining and the economic implications of diverting such a significant volume of electricity to non-essential sectors.
Legality of Crypto in Pakistan Under Question
The IMF’s concerns go beyond power consumption. The Fund has reportedly questioned the legality of cryptocurrencies in Pakistan, which remains a gray area under current financial regulations.
“There is a fear of further tough talks from the IMF on this initiative,” an official involved in the negotiations told Samaa. “The economic team is already facing stiff questions, and this move has only added to the complexities of the talks.”
Potential Risks to Power Tariffs and Fiscal Reforms
Analysts warn that allocating 2,000 MW to Bitcoin mining — a process known for its high energy consumption — could strain the national grid, inflate power tariffs, and divert resources from essential sectors like industry, agriculture, and residential users.
The IMF is especially concerned about the impact on power subsidy reforms and tariff rationalization efforts, which are part of the conditions attached to Pakistan’s financial assistance.
Government Yet to Respond Publicly
As of now, Pakistan’s Finance Ministry has not publicly responded to the IMF’s concerns. The situation adds another layer of complexity to Islamabad’s ongoing bid to secure a new long-term bailout package from the IMF, following the conclusion of a $3 billion standby arrangement earlier this year.