July 3, 2025 — Pakistan’s bold initiative to power its cryptocurrency mining industry using subsidized electricity has hit a significant roadblock, with the International Monetary Fund (IMF) formally rejecting the plan. The decision underscores growing concerns over energy strain, legal uncertainties, and broader market distortions tied to the controversial proposal.
IMF Pushes Back on Energy Subsidy for Crypto Mining
During a recent session of the Senate Standing Committee on Power, Secretary of Power Dr. Fakhray Alam Irfan confirmed that the IMF has refused to support the government’s proposed energy framework for the crypto sector.
“As of now, the IMF has not agreed,” stated Dr. Irfan, addressing lawmakers’ questions on the matter. He revealed that the IMF flagged several red flags about Pakistan’s plan to offer subsidized electricity tariffs specifically for cryptocurrency mining operations.
According to a report from Profit, the IMF cautioned that such a move could place additional stress on Pakistan’s already struggling power grid, while potentially distorting electricity market dynamics and undermining efforts to stabilize energy tariffs.
IMF Raises Legal and Infrastructure Concerns
The IMF’s rejection is rooted in both technical and regulatory concerns. Beyond energy market implications, the international lender expressed apprehension over the legality of crypto mining in Pakistan—a country where regulatory clarity around digital assets remains limited and evolving.
The fund also emphasized the risk of unequal resource distribution and unintended consequences on general power pricing. These issues are particularly sensitive in Pakistan, where power shortages and circular debt continue to weigh heavily on the energy sector.
Adding to the controversy, the IMF highlighted that the government had not consulted the institution prior to announcing its intention to allocate 2,000 megawatts of electricity for crypto mining and data centers. That announcement, made in May, was positioned as a way to attract foreign direct investment into the country’s digital economy.
Crypto Push Led by Pakistan Crypto Council and Finance Ministry
The proposed initiative is being spearheaded by the Pakistan Crypto Council, with backing from the Ministry of Finance. The plan aimed to carve out a significant share of the national energy output for digital mining infrastructure—marking one of the country’s most ambitious crypto-related projects to date.
Advocates of the proposal argue that it could help position Pakistan as a regional crypto hub and attract much-needed investment. However, the lack of regulatory alignment and consultation with key stakeholders, such as the IMF, has raised skepticism both at home and abroad.
Government Reconsiders Strategy Amid IMF Resistance
Following the IMF’s refusal, Pakistani authorities are now reevaluating their approach. Dr. Irfan confirmed that discussions with international institutions are ongoing to revise the proposed power subsidy framework in a way that aligns with both economic and regulatory expectations.
Meanwhile, the Senate committee turned its attention to broader energy reforms, including the use of technology to curb electricity theft—a major issue in Pakistan’s power infrastructure. Lawmakers also debated the government’s recent deal with commercial banks to reduce circular debt, with Senator Shibli Faraz criticizing the agreement, saying banks were “forced at gunpoint” to extend loans.
The Power Division has been instructed to present comprehensive responses and clarifications in the committee’s next session.
A Setback, Not the End?
While the IMF’s rejection is a clear blow to Pakistan’s crypto mining ambitions, it does not mark the end of the road. The government remains engaged in policy discussions and is expected to revise its energy strategy to better align with global financial institutions and legal frameworks.
For now, the rejection serves as a stark reminder of the complexities nations face when integrating crypto technologies into their mainstream economies—especially in regions grappling with infrastructure and regulatory challenges.
