Pakistan Forges Historic Crypto Alliance with Bitcoin Pioneer El Salvador

Two nations rewrite the financial playbook—one with regulatory muscle, the other with Bitcoin beaches.

When Pakistan shakes hands with El Salvador on crypto, it's not just diplomacy—it's a middle finger to traditional banking. The Central American trailblazer (who adopted BTC as legal tender back in 2021) just gained an unlikely partner in the world's fifth-most populous country.

Why this matters:

- Remittance revolution: Combined $40B+ in annual cross-border payments now has a crypto-powered bypass

- Regulatory domino effect: Islamabad's move pressures FATF holdouts to pick a side

- The ultimate hedge: Two economies with dollar vulnerabilities building parallel financial rails

Wall Street analysts are already downgrading Western Union stock.

Pakistan’s crypto power push faces IMF scrutiny over market distortion risks

Back in Pakistan, digital currency trading is already widespread despite central‑bank warnings about market volatility and consumer risks. Between 15 million and 20 million Pakistanis hold cryptocurrencies, according to Saqib.

To channel this momentum, the coutnry has earmarked 2,000 megawatts of electricity for Bitcoin mining and announced plans to establish a national Bitcoin reserve.

However, Fakhre Alam Irfan, Pakistan’s Power Secretary, told the Senate’s Energy Committee that the IMF has raised concerns over offering preferential electricity rates to crypto miners, warning it could skew the country’s delicate power market and intensify existing vulnerabilities.

Although Pakistan often has extra electricity, especially in winter, the IMF warns that offering special prices for crypto miners could upset the balance between supply and demand. Under the terms of Pakistan’s $7 billion IMF facility, any major shifts in energy policy must receive prior IMF sign‑off.

In July 2025, Pakistan formally established the Pakistan VIRTUAL Assets Regulatory Authority (PVARA) to license and oversee virtual‑asset exchanges, wallets, stablecoins and related services.

This MOVE followed an April 2025 Letter of Intent between the Pakistan Crypto Council and World Liberty Financial, a Trump‑backed firm, aimed at fast‑tracking blockchain adoption through pilot regulatory sandboxes and stablecoin initiatives.

Although Pakistan avoided a sovereign default in 2023, it still faces steep financing needs. The IMF projects that it will require more than $100 billion in external funding by 2029 to cover budget and balance‑of‑payments gaps.

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