In a move that has left economists and observers perplexed, Pakistan, amid a severe cost-of-living crisis, has decided to enter the cryptocurrency market. The country recently secured loans from the International Monetary Fund (IMF) and the World Bank, aimed at stabilizing its failing economy. However, instead of prioritizing economic reforms or social infrastructure, Pakistan has taken a surprising turn—by investing in Bitcoin.
At the center of this bold gamble was Pakistan's presence at the Las Vegas Bitcoin conference, a high-profile event also attended by U.S. Vice President JD Vance and President Donald Trump’s sons. There, Pakistan unveiled its “strategic Bitcoin reserve,” likening it to the traditional gold reserves held by many countries. The move appeared to mimic President Trump’s own initiative of creating a strategic cryptocurrency reserve in the U.S., which largely consists of crypto assets seized during enforcement raids rather than direct government purchases.
Pakistan’s Bitcoin reserve isn’t just a symbolic move. The country has gone all in. In April, it signed a deal with Trump’s family-run crypto venture, World Liberty Financial, intending to position Pakistan as a global crypto hub. A total of 2,000 megawatts of electricity has been allocated for Bitcoin mining alone—a staggering number for a nation already plagued by power shortages.
Pakistan has also created a Crypto Council to streamline and regulate the sector, further signifying its long-term intentions in the digital asset space. But while these moves seem futuristic on paper, they’re being viewed by many as political posturing meant to gain favor with the current U.S. administration under President Trump. Critics argue that it's a classic case of “monkey see, monkey do”—a nation blindly following trends to curry international favor, instead of focusing on its citizens' pressing needs.
The reality on the ground tells a different story. Inflation in Pakistan rose by 3.5% year-on-year in May. The Purchasing Managers’ Index (PMI) dropped to a three-month low of 57.6, and people are experiencing severe power outages, high food prices, and financial distress. Yet, crypto mining—an energy-intensive process—continues to receive large-scale electricity allocation, a decision many see as detached from the country’s immediate economic needs.
Adding to the concern is the unregulated nature of cryptocurrency in Pakistan. Crypto has become a haven for money laundering and terror financing due to its untraceable nature. In fact, Pakistan now has more crypto investors than stock market investors, which raises alarms about the country’s financial priorities and regulatory controls.
To rescue Pakistan from spiraling further, the IMF recently extended a $2.1 billion loan as part of its ongoing bailout program. But this time, the Fund is not writing a blank check. It has mandated that Pakistan implement tougher compliance measures, especially at the provincial level. One of the key requirements is the imposition of agricultural income tax by September this year—a long-avoided policy change. The IMF has also demanded that Pakistan continue cost-cutting efforts, particularly in the power sector, and offer a level playing field for all consumers.
Moreover, the IMF is strongly opposing Punjab's proposed subsidies on electricity and gas, emphasizing that such populist measures could derail recovery plans. After decades of bailouts—more than $40 billion in loans since 1958—the IMF is finally tightening the leash, telling Islamabad to clean up its fiscal act.
Meanwhile, questions abound regarding how Pakistan plans to power its crypto mining and AI data center dreams when even basic electricity needs remain unmet for its population. High tariffs, outdated infrastructure, and an absence of clarity on usage policies further complicate this ambitious yet unrealistic vision.
Ultimately, this entire episode underscores a grim irony. A country drowning in debt, with millions of its citizens facing economic hardships, is prioritizing flashy international crypto partnerships and mining projects. While the announcement was likely aimed at impressing the Trump administration and international investors, it has also exposed Pakistan’s hollow capacity to realize such digital ambitions.
Pakistan’s crypto dream might be loud in headlines, but in the absence of a clear plan, strong governance, and focus on people’s welfare, it risks becoming just another failed promise in a long list of misadventures.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult a professional before making investment decisions.
