The International Monetary Fund (IMF) has rejected Pakistan’s proposal to provide state-subsidized electricity to Bitcoin mining operations, dealing a significant setback to the country’s ambitions of becoming a crypto-mining hub. The decision, confirmed during a Senate Standing Committee on Power session on July 3, 2025, halts plans to allocate 2,000 megawatts from Pakistan’s 7,000 MW electricity surplus at rates of 23–24 Pakistani rupees ($0.08) per kWh.
Policy Rationale and IMF Objections
Pakistan’s Power Secretary Dr. Fakhray Alam Irfan disclosed that the IMF cited concerns over market distortions and ineffective historical precedents. The fund explicitly compared the subsidies to “tax holidays” that undermine market efficiency and questioned how Pakistan would transition miners back to market-based pricing post-subsidy. This rejection follows two prior proposals: a six-month marginal-cost tariff pitched in September 2024 (later reduced to three months under IMF pressure) and a revised November 2024 submission, both vetoed.
Strategic Context
The subsidy plan formed part of Pakistan’s broader May 2025 initiative to establish a national Bitcoin reserve and support mining, mirroring U.S. strategic discussions. State Minister for Blockchain and Crypto Bin Saqib had positioned crypto adoption as a tool for economic inclusion among Pakistan’s 100 million unbanked citizens. However, the IMF’s intervention underscores global financial institutions’ skepticism toward state-backed crypto-industrial policies.
Operational Impact
Without subsidized power, Pakistan-based miners face profitability challenges given market electricity rates exceeding the proposed $0.08/kWh. The decision effectively stifles immediate growth opportunities for mining operations in a country with abundant untapped energy resources. Industry analysts warn this could redirect investment to jurisdictions with more favorable regulatory frameworks, such as the United States.
Broader Implications
The IMF’s stance signals heightened scrutiny of energy subsidies for crypto mining worldwide, particularly in emerging economies. It reinforces a compliance dichotomy: While developed markets like the U.S. focus on institutional oversight, developing nations face pressure to prioritize grid stability and fiscal prudence over crypto-industrial incentives. Pakistan’s government remains in talks with international bodies to revise its strategy, though any viable compromise appears distant.
This reporting is based on verified statements from Pakistan’s Senate proceedings and IMF communications.
