Pakistan has announced plans to use surplus electricity for crypto mining. According to reports, the country is working on special tariffs attracting companies to the crypto mining and blockchain technology industries.
In the report, Pakistan mentioned that it will encourage the creation of crypto and blockchain data centers, using surplus power at marginal costs to push the growth in the cryptocurrency industry. According to the report, sources familiar with the matter mentioned that the power division had been in a consultation meeting with various stakeholders over the last few weeks.
In the report, the power division wants to create attractive tariffs for emerging industries and sectors without adding subsidies. This way, the country can absorb surplus power and reduce the payments that these firms have to make for it. According to recent estimates, miners in Pakistan spend at least 70% of their total earnings on electricity.
Pakistan wants to bolster firms in the crypto mining industry
According to the sources, Pakistan wants to use the new initiate to position itself to attract firms, but it will require the country to focus more on stabilizing its power supply. Bitcoin mining has been a power-intensive operation over the last decade, with estimates putting the annual energy consumption rate at over 130 terawatt per hour (TWh). This annual consumption is greater than that of some countries including Argentina or the Netherlands.
Because of its high energy demand, some countries have introduced special tariffs for crypto mining activities while others have cracked down on it. For example, China used to be the darling of the crypto mining industry, but the country announced a ban on the industry in 2021. The Chinese government gave reasons like environmental concerns and power shortages, which led to the decision to halt activities in the sector.
Iran is also in the same bracket, with the country subsidizing electricity for miners but usually shuts down operations during peak consumption periods. In November 2024, Tehran and some other provinces in the region faced heavy blackouts for weeks, with reports mentioning that crypto mining activities had a role to play in the heavy outages. Kazakhstan also embraced crypto mining but is now charging higher electricity tariffs and taxes due to the rising energy shortages.
Crypto Council and Power Minister locked in discussions
According to sources, the Power Minister Awais Leghari had been locked in talks with the chief executive of the newly formed Pakistan Crypto Council (PCC) Bilal Bin Saqib. At a recent meeting, the pair had discussed extensively the potential opportunities in the market as crypto miners are eagerly anticipating an opportunity to benefit from the excess electricity in the country.
The recent discussion was before the inaugural meeting of the council presided over by Finance Minister Muhammad Aurangzeb. According to an official statement, Mr Saqib “presented the concept of leveraging Pakistan’s surplus electricity for bitcoin mining, potentially turning the country’s liabilities into assets.” The meeting also recorded the attendance of State Bank of Pakistan (SBP) Governor Jameel Ahmad, Securities and Exchange Commission of Pakistan (SECP) chairman Akif Saeed, and other members from the IT and law ministries.
The meeting discussed the potential that Pakistan has in the crypto space, which has remained untapped. During the meeting, Mr Saqib also highlighted the comprehensive vision and mission of the council. He also discussed the present state of the crypto industry in the country, noting that the current challenges are what has limited Pakistan’s adoption of digital assets. One of the major areas he mentioned was regulatory clarity.
According to the Finance Minister, the PCC should play the role of shaping the future of digital assets in the country, hoping that the council will serve as an umbrella to unite all the relevant bodies and stakeholders to work on a comprehensive, responsible, and forward-thinking crypto regulatory framework. “This is the beginning of a new digital chapter for our economy. We are committed to building a transparent, future-ready financial ecosystem that attracts investment, empowers our youth, and puts Pakistan on the global map as a leader in emerging technologies,” he said.
During the meeting, the council agreed to learn from the best global practices to ensure that businesses and revenue models are not just in line with global practices, but also in line with local realities. In this regard, he has also agreed to use the existing work done by various growth, leveraging their knowledge and experience. They also discussed the importance of sequencing the rollout, running pilot programs, and ensuring adherence to international obligations were also discussed.
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