The International Monetary Fund (IMF) has rejected the Pakistani government's proposal to provide discounted electricity for Bitcoin mining and other energy-intensive sectors, raising concerns over potential economic risks.
IMF's Objections to Pakistan's Proposal
The IMF raised concerns about the plan, stating it may impose additional stress on the country's energy sector. Secretary of Power Dr. Fakhray Alam Irfan stated during a Senate Standing Committee meeting that the agency is worried about potential market disruptions related to the subsidized energy rates proposal.
Pakistan's Plans for Power Allocation
Previously, Pakistan announced plans to allocate 2000MW of power to support Bitcoin mining and data centers to attract foreign investment. Bilal Bin Saqib, CEO of the Pakistan Crypto Council, mentioned that the location of mining centers would be determined based on surplus power availability. The IMF also noted that Pakistan had not consulted with the fund before announcing the plan.
Growing Crypto Adoption in Pakistan
Saqib indicated that there are between 15 and 20 million crypto users in the country, with Pakistan being the third-largest freelancing economy. Furthermore, despite the lack of official regulation, Pakistan ranks among the leading countries globally for crypto adoption, with the electricity allocation expected to promote digital infrastructure development and create job opportunities.
The IMF's rejection of the electricity subsidy proposal highlights the challenges Pakistan faces in its efforts to develop technology and attract investments while the popularity of cryptocurrencies continues to shape the country's economic landscape.
