Pakistan Explores Utilizing Surplus Energy for Cryptocurrency Mining and Blockchain Development

The Pakistani government is considering leveraging its surplus electricity to power cryptocurrency mining operations, aiming to attract blockchain-based data centers and bolster the digital asset industry.

Key Initiatives:

  • Special Electricity Tariffs: Officials are formulating cost-effective electricity tariff structures to encourage crypto miners to operate in Pakistan without imposing subsidies on the national grid.
  • Stakeholder Consultations: The Power Division is engaging with stakeholders to develop tariffs that make crypto mining economically viable while absorbing excess power production and potentially reducing capacity payments to independent power producers (IPPs).

Global Context:

Bitcoin mining is known for its high energy consumption, requiring over 130 terawatt-hours (TWh) annually—surpassing the electricity usage of countries like Argentina or the Netherlands. Different countries have adopted varied regulatory approaches:​

  • China: Banned Bitcoin mining in 2021 due to environmental concerns and power shortages.
  • Iran: Offers subsidized electricity for crypto miners but halts operations during peak consumption periods to prevent grid overload.
  • Kazakhstan: Initially welcomed miners but later imposed high electricity tariffs and taxes due to growing power shortages.
  • El Salvador: Utilizes low-cost geothermal energy from volcanoes to power its mining operations.

Pakistan’s Balanced Approach:

Pakistan aims to strike a balance between economic opportunity and energy management by avoiding outright bans and ensuring sustainable use of power resources.

Role of the Pakistan Crypto Council (PCC):

The recently established Pakistan Crypto Council (PCC) is expected to play a pivotal role in shaping the regulatory framework for blockchain technology and digital assets, fostering a secure environment for investors and businesses.