Pakistan Plans to Use Extra Electricity for Bitcoin Mining as a Way to Reduce Wasted Energy

Unlike other countries, Pakistan wants to dedicate surplus power to crypto mining.

Pakistan is considering legalizing bitcoin mining as a way to use up extra electricity and generate income, the Pakistan Crypto Council said.

The Ministry of Energy is planning a special electricity tariff for industries like bitcoin mining, hoping to attract investors without needing to give them government funds, the PCC said.

Miners prefer cheap electricity, which Pakistan has a surplus of, so the government is trying to bridge this gap and solve a long-standing issue in the power sector, economically.

This idea was discussed at length during a key meeting between Power Minister Awais Leghari and Bilal Bin Saqib, the CEO of the newly formed PCC. They explored how Pakistan could become a global hub for cryptocurrency mining.

This meeting was later followed up on by an even bigger gathering, chaired by Finance Minister Muhammad Aurangzeb and attended by top officials, including the State Bank Governor and various regulators. The aim was to decide whether or not Pakistan should legalize and encourage crypto mining as part of its economic strategy.

However, while several countries have tried and failed to manage the huge electricity demand from bitcoin miners, Pakistan’s plan could work.

Reports claim that bitcoin miners spend up to 70% of their earnings on electricity. This drove China to ban crypto mining due to environmental concerns, while Kazakhstan initially welcomed it before imposing higher taxes. Iran, on the other hand, offered discounted rates but often suspended mining during periods of peak electricity demand.

But Pakistan is planning to take a different approach. Instead of overloading the national grid with extra demand, the country aims to create a stable and competitive energy supply specifically dedicated to crypto mining. This move could attract global blockchain-based data centers to set up shop in Pakistan.

If Pakistan manages to welcome mining companies into the country, it could generate a new revenue stream and use its excess power more efficiently.

During the meeting, Bilal Bin Saqib also presented a plan for using Pakistan’s extra energy for bitcoin mining while also making clear rules for the industry. He said that the country should make a policy that fits its own needs and benefits its people.

"We discussed the pressing matter of Pakistan's surplus energy and how it can be used to generate revenue for the nation," said the PCC in a statement.

"The council presented a proposal for legalizing and regulating bitcoin mining within the country, presenting a unique opportunity to transform a socio-economic challenge into a significant economic driver."

However, while the plan holds great promise, its success depends largely on swift and efficient execution.

The government will need to move quickly to provide regulatory clarity, ensure compliance with global financial and anti-money laundering (AML) regulations, and guarantee a stable and competitive energy supply to attract these companies to set up shop in Pakistan.