Pakistan's Bitcoin Energy Plan
In 2025, Pakistan faces a paradox of abundance and scarcity in its
power sector. Although the total electricity
capacity has reached 46,600 MW, almost 14% of this capacity remains unused, especially
during the winter months when demand drops to 12,000 MW. The main problem lies
in the so-called capacity payments – fixed fees that the government pays
to power plants regardless of whether they produce electricity. Those costs
amount to 2.1 trillion Pakistani rupees (about $7.45 billion) a year,
burdening citizens even when power plants are idle. This volatile energy
picture is dominated by fossil fuels (56% of installed capacity), while the rapid growth
of solar energy – driven by Chinese solar panels – is further destabilizing the
grid. In such a context, Pakistan is considering an innovative approach:
diverting up to 2,000 MW of excess energy towards Bitcoin mining and
artificial intelligence data centers. Supporters of this plan argue
that it could convert unused energy into revenue, reduce the load on the
grid and open the door to the digital economy. Critics, on the other hand,
warn of increasing dependence on fossil fuels, possible environmental damage and
the question of whether the benefits will really reach average citizens.
Source: cointelegraph
Can Bitcoin Solve Pakistan's Energy Problem?
In
May 2025. Pakistan has surprised the world with a bold idea: to divert 2,000
MW of unused electricity towards Bitcoin mining and AI data
centers. This initiative is led by the newly established Pakistan Crypto
Council (PCC), headed by the Prime Minister’s Technology Advisor,
Bilal Bin Saqib. His vision is simple – to turn excess energy
into economic income. At the Bitcoin 2025 conference in Las Vegas, Bin Saqib
presented Pakistan as a new oasis for cryptocurrency miners, thanks to
cheap and untapped electricity. The initiative immediately attracted
global attention – from media outlets such as Reuters and Bloomberg, to major
investors, including Binance co-founder Changpeng Zhao, who has been
appointed as PCC’s strategic advisor.
While
the crypto community supports the move as the start of Pakistan’s digital reform,
the International Monetary Fund (IMF) is expressing concern about the
possible diversion of resources in a country that continues to suffer from intermittent power outages
. The government, on the other hand, points out that unused power plants cost the state
2.8 trillion rupees a year, while mining could bring in about $500 million
in revenue and create thousands of new jobs in the technology sector. But the
key question still remains – is this a sustainable solution or just a
temporary patch in the energy system that requires deeper reform?
Source: cointelegraph
Crypto mining and energy reform
Pakistan’s strategy of diverting excess energy towards Bitcoin mining and AI data centers does not just stay at the level of an idea – but includes concrete operational steps. One of the key elements is the conversion of old coal-fired power plants, which are currently operating at a capacity of only 15% while generating huge fixed costs. The plan is to turn these financial losses into a source of revenue, and in the first phase, power plants such as Sahiwal, China Hub and Port Qasim are targeted. However, concerns remain about the high operating costs and environmental impact of extending the lifespan of these obsolete plants.
For long-term sustainability, Pakistan must attract foreign companies that will locate their mining or AI operations close to the power source, thereby reducing losses in power transmission. However, the weak infrastructure of the power grid requires significant investments to be able to support the 24-hour demands of such centers. Digitally, the state is going a step further: a National Bitcoin Wallet is being created for the state’s digital asset portfolio, and the Pakistan Digital Asset Authority (PDAA) – a regulatory body in charge of licensing, taxation, and anti-money laundering – has been launched. Tariff breaks have also been introduced for the import of ASIC mining devices to encourage investment.
The biggest challenge, however, remains the price of electricity. With a commercial price of around $0.22 per kWh, mining in Pakistan is significantly more expensive compared to competing regions. The proposed subsidized tariff of $0.09 per kWh could improve competitiveness, but it faces potential resistance from the IMF, as energy subsidies contradict agreed fiscal austerity measures.
Source: cointelegraph
The Benefits of Energy Mining in Pakistan
Pakistan’s new initiative has a clear goal: to convert surplus electricity from underutilized thermal power plants into a source of income through Bitcoin mining and the development of AI data centers. This attempts to transform the burden of capacity payments into an opportunity to acquire high-value digital assets. However, the potential of this strategy goes beyond just the energy sector. Pakistan hopes to leverage its geostrategic position to become a “digital bridge” between Asia, Europe, and the Middle East – as a global hub for data centers and digital innovation.
To attract foreign investment, the government has devised a stimulus package that includes tax breaks and tariff exemptions on mining equipment and AI infrastructure. This could open the door to the arrival of big players from the world of cryptocurrencies and artificial intelligence, encourage the development of high-tech jobs and accelerate the digitalization of the domestic economy.
The plan also envisages the formation of a state-owned “Strategic Bitcoin Reserve” – a kind of national digital vault in which mining revenues would be accumulated as part of a long-term monetary strategy. This sends a strong message to Pakistan: digital assets are becoming an integral part of its future economic stability. Interestingly, just a few years earlier, in April 2018, the State Bank of Pakistan (SBP) banned financial institutions from working with cryptocurrencies. Today’s politics represent a complete shift – from a ban to the ambition to become a digital power.
Source: cointelegraph
Problems of Pakistan's strategy
While the Bitcoin mining plan in Pakistan promises significant benefits, the country faces a number of serious hurdles that could jeopardize the viability of the entire strategy. First of all, relying on old, inefficient coal-fired power plants for the continuous operation of mining centers raises concerns about sustainability and reliability. Pakistan’s power grid is already plagued by transmission losses and frequent outages, posing an additional risk to ensuring the stable power supply necessary for the uninterrupted operation of data and mining centers.
Financial pressures also come from the international side. The International Monetary Fund (IMF) has expressed grave concerns about the shift of energy towards mining, especially amid sensitive negotiations to extend the arrangement under the EFF program. There are fears that subsidizing electricity for miners could violate the terms of a bailout agreement and complicate budget negotiations.
An even greater threat lies in the possible negative impact on the energy security of citizens. If mining results in reduced availability of electricity for households and industry, or increases prices for end users, it could cause public dissatisfaction and distort the perception of the project as economically beneficial.
In addition, despite the formation of bodies such as the Pakistan Crypto Council (PCC) and the Pakistan Digital Asset Authority (PDAA), the legal and regulatory picture of cryptocurrencies in the country remains blurry. The lack of a uniform legislative framework creates a legal grey area that can discourage foreign investors and expose domestic participants to regulatory and legal risks.
Source: cointelegraph
Bitcoin Mining and Pakistan: What's Next?
The first phase of Pakistan’s Bitcoin mining initiative, launched in 2025, envisages allocating 2,000 MW of electricity to mining and AI data centers. But this is only the beginning – future phases include the integration of renewable energy sources such as solar, wind and hydropower, which Pakistan seeks to ensure long-term sustainability and reduce dependence on fossil fuels. This transition would not only improve the environmental profile of the project, but would also increase its attractiveness for foreign partners focused on sustainable technologies.
The position of the International Monetary Fund will be a decisive factor in further development. Given that Pakistan is still under the EFF loan arrangement, it is crucial to obtain clear IMF approval for energy distribution and possible mining-related subsidies. The outcome of these consultations will largely determine the pace and direction of the implementation of the entire plan.
The ultimate success of this strategy will depend on the actual arrival of global mining and AI companies. While there is initial interest, the actual deployment – that is, the operational use of the allocated megawatts – will be a real test of feasibility. Global investors will be watching closely to see if Pakistan can offer a stable, competitive electricity price and address regulatory challenges. Ultimately, the measure of success will be concrete investments and functional facilities, and not just political announcements and strategies on paper.
