IMF Axes Pakistan’s Controversial Bitcoin Mining Subsidy Plan – Crypto Industry Reels

The International Monetary Fund just slammed the brakes on Pakistan’s bid to become a Bitcoin mining hotspot—by cutting off its subsidy lifeline.

No free electricity for crypto miners: Islamabad’s plan to juice its energy grid into a mining paradise got vetoed by IMF austerity hawks. Turns out, ‘free market’ doesn’t mean free power.

Developing nations’ crypto dilemma: Another case of global finance clipping local ambitions—unless you count IMF staffers probably DCA’ing into BTC on their lunch breaks.

TLDR

• The International Monetary Fund has rejected Pakistan’s proposal to offer subsidized electricity for Bitcoin mining.
• The IMF warned that such subsidies could distort the energy market and harm the country’s economic stability.
• Pakistan planned to introduce a tariff of 22 to 23 rupees per kilowatt-hour for energy-intensive industries including crypto mining.
• The proposal aimed to utilize surplus electricity during the winter and attract investment in the digital sector.
• Power Secretary Fakhre Alam Irfan confirmed that all major energy policies must receive IMF approval before implementation.

The International Monetary Fund (IMF) has rejected Pakistan’s efforts to utilize surplus electricity for Bitcoin mining. The IMF dismissed a proposal to provide subsidized electricity to high-energy industries, including crypto mining operations. As a result, the country’s digital transformation strategy now faces a significant challenge.

The IMF expressed concern that subsidized electricity could distort Pakistan’s energy market and worsen existing sectoral inefficiencies. The proposed tariff was part of a broader plan to attract investment in bitcoin mining and other digital sectors. However, without IMF approval, Pakistan cannot implement any significant energy policy change.

The government had outlined a tariff of 22 to 23 rupees per kilowatt-hour for energy-intensive industries. Officials expected this to absorb surplus winter electricity and support new tech industries. However, the IMF compared the plan to previous economic policies that led to market imbalances.

IMF Opposes Sector-Specific Electricity Subsidies

The IMF objected to electricity subsidies for Bitcoin mining, citing their potential to disrupt the fragile energy market structure. Power Secretary Fakhre Alam Irfan confirmed that the IMF rejected the tariff scheme for being economically distorting. All new energy policies must secure approval from the IMF before implementation.

While Pakistan holds excess electricity, especially during colder months, the IMF remains firm on market-driven pricing. Any deviation from marginal-cost tariffs could trigger economic distortions and reduce transparency in the power sector. The Power Division had hoped to increase industrial electricity consumption through targeted subsidies.

Officials argued that crypto mining could offer a reliable way to consume surplus electricity and earn foreign exchange. But the IMF dismissed such benefits, stressing long-term sustainability over short-term gains. Therefore, the proposal now awaits further review from other global financial institutions.

Bitcoin Mining Policy Still Under Review

Although the IMF rejected the subsidy plan, the policy is not entirely off the table, according to Irfan. The government is now working with the World Bank and other partners to refine the Bitcoin mining framework. It plans to introduce modifications that align with international financial standards.

In May 2025, Pakistan allocated 2,000 megawatts of surplus electricity for AI centers and Bitcoin mining operations. Finance Minister Muhammad Aurangzeb introduced tax exemptions for miners to attract international investment. These initiatives were part of a broader digital strategy endorsed by the Pakistan Crypto Council.

Saqib, who leads the Council, proposed using runoff energy for Bitcoin mining and revealed plans for a national Bitcoin reserve. He continues to push for decentralized finance mechanisms to grow Pakistan’s Bitcoin holdings. Discussions with global figures like Michael Saylor have reinforced this strategic direction.