The International Monetary Fund (IMF) has rejected Pakistan’s latest proposal to subsidize electricity for Bitcoin mining. This is not the first time the South Asian country has proposed such a bid. They have previously also proposed to subsidize other energy-intensive industries in order to support their crypto efforts. The IMF has raised concerns about the long-term economic viability as well as market distortions for rejecting the bid.

IMF Rejects Pakistan’s Bid

Dr. Fakhray Alam Irfan, Secretary of Power, confirmed during a session of the Senate Standing Committee on Power that the IMF is opposed to the country’s plan. The plan included allocating 2,000 megawatts from Pakistan’s 7,000 MW electricity surplus to crypto mining operations. The subsidized rate was fixed at PKR 23-24 per kilowatt-hour (about $0.08/kWh), which is a lot less than what the market usually charges.

Dr. Irfan says that the IMF sees the plan as a sort of economic distortion similar to tax holidays. He warns that these kinds of incentives usually hurt market discipline and efficiency. “They questioned how we would reintegrate subsidized users into the market system after the subsidy ends,” Irfan stated. He also added that the IMF pointed to historical examples where similar incentives failed to produce intended economic growth.

The first time Pakistan brought up its idea was in September 2024. It was a six-month marginal cost tariff plan to help the country’s new crypto industry grow while making use of its extra energy. However, the IMF put pressure on it to cut it down to three months. In November 2024, a revised version with targeted subsidies was similarly turned down.

Despite the setbacks, Dr. Irfan emphasized that the government remains in dialogue with global institutions to explore more acceptable frameworks that align with international monetary standards. “We’re not abandoning the idea, but we’re working on making it more transparent and economically sound,” he said.

The subsidized electricity plan was part of a broader national strategy to embrace digital assets and blockchain technology. In May 2025, Pakistan announced its intention to establish a Strategic Bitcoin Reserve and support regulated crypto mining. The move drew inspiration from proposals under the administration of former U.S. President Donald Trump, which aimed to nationalize aspects of Bitcoin infrastructure.

Minister of State for Blockchain and Crypto, Bin Saqib, spoke passionately about the socioeconomic potential of digital currencies during the Bitcoin 2025 conference held in Las Vegas. Saqib said, “We have over 100 million unbanked citizens. This is more than just mining — it’s about economic inclusion. We believe crypto and blockchain technology can help people leap across class barriers.”

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However, critics argue that subsidizing crypto mining diverts valuable energy resources, especially in a country where frequent power outages still affect many regions. Environmental concerns have also been raised about the carbon footprint of large-scale mining operations.

The IMF’s firm stance underscores the difficulty developing nations face when attempting to merge innovative digital finance strategies with existing macroeconomic policies. For Pakistan, the road to becoming a regional crypto hub may be longer and more complex than anticipated, especially under the watchful eye of international lenders.

While the future of Bitcoin mining in Pakistan remains uncertain, one thing is clear: the government must balance innovation with fiscal responsibility to gain international approval.

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