The International Monetary Fund (IMF) has rejected Pakistan's proposal to subsidize electricity for crypto mining, creating a setback for the country's ambition to become a regional crypto mining hub.
IMF's Rejection of Subsidies
According to Pakistan’s Power Secretary Dr. Fakhray Alam Irfan, the IMF declined to support a plan to offer discounted electricity rates to crypto miners. "As of now, the IMF has not agreed," Irfan told lawmakers during a Senate committee hearing. The proposal, initially proposed in September 2024, aimed to offer electricity at $0.08 per kWh to crypto miners to help absorb Pakistan’s seasonal energy surplus. However, the IMF warned that subsidized power packages, especially those targeting specific industries, risk undermining an already fragile electricity sector.
Economic Promise vs. Energy Realities
The IMF’s rejection highlights a key dilemma: while crypto mining could bring in foreign investment and strengthen digital infrastructure, it must not come at the cost of further destabilizing Pakistan’s struggling power grid. Mohith Agadi, founder of Fact Protocol, said: "This is a fundamental tension. Crypto mining can generate economic value, but sustainability and energy equity must come first."
Calls for a Sustainable Roadmap
Some industry figures believe Pakistan’s crypto energy strategy needs a slower rollout. Pranav Agarwal, director at Jetking Infotrain India, said: "Start small. Use existing hydropower or solar potential, demonstrate value over time, and build IMF support gradually." Critics warn that launching large-scale subsidized mining without a resilient energy base could backfire, especially as regulators and credit agencies look for economic reforms in exchange for financial support.
Thus, the IMF's rejection of subsidies underscores the need for a balanced approach to developing crypto mining in Pakistan, which considers both economic prospects and energy infrastructure realities.
