By: Zumair Ashraf
In recent years, Pakistan has emerged as an unexpected contender in the global cryptocurrency landscape, with a growing focus on cryptocurrency mining. Once hesitant about digital currencies, the country is now embracing this transformative technology to leverage its surplus energy, attract foreign investment, and position itself as a regional hub for blockchain innovation. This shift marks a significant departure from past policies and signals a new chapter in Pakistan’s economic and technological ambitions. However, as the nation dives into this high-stakes arena, it faces both promising opportunities and formidable challenges.
Pakistan’s journey with cryptocurrency mining has been turbulent. In April 2018, the State Bank of Pakistan imposed a ban on trading and mining virtual currencies, citing concerns over financial instability and illicit activities. This led to a temporary decline in mining operations, with authorities shutting down several mining farms. Despite the restrictions, a resilient underground mining industry persisted, driven by tech-savvy individuals and small-scale operations using mining pools like ViaBTC and Slush Pool.
The tide began to turn in 2020 when the Khyber Pakhtunkhwa provincial assembly passed a resolution to legalize cryptocurrency mining and approved government-funded Bitcoin mining farms powered by hydroelectricity. This marked a pioneering step, leveraging Pakistan’s abundant renewable energy resources in the northern regions. By 2021, Pakistan ranked third globally in cryptocurrency adoption, according to Chainalysis’ 2021 Global Crypto Adoption Index, with an estimated 15-20 million crypto users and a trading volume reaching $25 billion annually.
The most significant development came this year, when Pakistan announced a strategic allocation of 2,000 MW of surplus electricity for Bitcoin mining and AI data centers, spearheaded by the newly formed Pakistan Crypto Council (PCC). Led by Bilal Bin Saqib, a British-Pakistani tech entrepreneur and advisor to the Finance Minister, the PCC aims to monetize unused energy, create high-tech jobs, and attract billions in foreign direct investment. Estimates suggest this initiative could generate nearly $2 billion annually in cryptocurrency revenue. Additionally, Pakistan unveiled a Strategic Bitcoin Reserve in May 2025, positioning itself among a select group of nations holding Bitcoin as a sovereign asset.
Several factors have fueled Pakistan’s pivot toward cryptocurrency mining. First, the country’s surplus electricity, particularly from hydroelectric, solar, and wind sources, presents a unique opportunity. With high electricity tariffs and a growing shift to solar energy among consumers, the government sees crypto mining as a way to utilize excess capacity and reduce financial burdens from capacity payments.
Second, Pakistan’s economic challenges, including high inflation, a devaluing rupee, and low foreign reserves, have made cryptocurrencies an attractive hedge for citizens. Stablecoins, in particular, have gained popularity as a means to access US dollar exposure amid import restrictions. The country’s tech-savvy youth, with over 60 percent of the population under 30, are driving adoption, viewing crypto as both an investment and a pathway to financial inclusion.
Pakistan’s embrace of cryptocurrency mining reflects a bold vision to harness digital innovation for economic growth. By leveraging surplus energy and a young, dynamic population, the country has the potential to become a regional crypto hub, attracting investment and creating jobs. However, the path forward requires careful navigation of regulatory, infrastructural, and security challenges. A balanced approach—combining clear regulations, sustainable energy policies, and robust oversight—will determine whether Pakistan’s crypto ambitions catalyze a digital revolution or court unintended crises. As the nation stands at this critical juncture, its ability to align innovation with responsibility will shape its place in the global digital economy.
Third, global trends have influenced Pakistan’s strategy. The USA’s pro-crypto policies under the Trump Administration, including the establishment of a Bitcoin reserve, have inspired similar moves in Pakistan. The involvement of high-profile figures like Finance co-founder Changpeng Zhao as an advisor to the PCC underscores international confidence in Pakistan’s crypto ambitions.
Despite the enthusiasm, Pakistan’s crypto mining push is not without hurdles. The country’s energy infrastructure remains a significant concern. While surplus capacity exists on paper, outdated transmission and distribution systems, high line losses, and frequent power shortages— such as the 6,000 MW shortfall reported in October 2023— could strain the grid if energy-intensive mining operations scale up. Critics warn that diverting power to mining could exacerbate load-shedding for households and industries, deepening public discontent.
Regulatory uncertainty is another major issue. Despite the government’s progressive rhetoric, cryptocurrencies remain illegal under existing laws, as reaffirmed by the State Bank of Pakistan and the Ministry of Finance in 2024. This contradiction has raised concerns among lawmakers, who question the risks of encouraging public investment in a legally ambiguous sector. The International Monetary Fund (IMF), a key lender to Pakistan, has also expressed reservations about the 2000 MW allocation, citing potential impacts on power tariffs and fiscal stability.
Security risks loom large as well. Pakistan’s history of scrutiny over terrorism financing, coupled with the anonymity of cryptocurrencies, raises fears of misuse for illicit activities. The US Department of Justice’s 2020 seizure of crypto assets linked to terrorism highlights these risks. Without a robust regulatory framework, Pakistan risks undermining its recent removal from the Financial Action Task Force (FATF) grey list.
To succeed, Pakistan must address these challenges strategically. The establishment of the Pakistan Digital Assets Authority to license and supervise crypto service providers is a step in the right direction. Regulatory clarity, as emphasized by Finance Minister Muhammad Aurangzeb, is essential to foster investor confidence and ensure compliance with international standards. Investing in energy infrastructure upgrades and prioritizing renewable energy for mining operations will be critical to balancing economic benefits with grid reliability.
Moreover, Pakistan should focus on education and upskilling its youth in blockchain and AI technologies. Initiatives like regulatory sandboxes can nurture innovation while mitigating risks. Collaboration with global energy and tech firms, as well as learning from countries like Bhutan, which successfully uses hydroelectric power for mining, can position Pakistan as a competitive player.
Pakistan’s embrace of cryptocurrency mining reflects a bold vision to harness digital innovation for economic growth. By leveraging surplus energy and a young, dynamic population, the country has the potential to become a regional crypto hub, attracting investment and creating jobs. However, the path forward requires careful navigation of regulatory, infrastructural, and security challenges. A balanced approach—combining clear regulations, sustainable energy policies, and robust oversight—will determine whether Pakistan’s crypto ambitions catalyze a digital revolution or court unintended crises. As the nation stands at this critical juncture, its ability to align innovation with responsibility will shape its place in the global digital economy.
The writer is a chartered accountant and chartered financial analyst with a multinational nonbanking financial institution in Dubai.
