ISLAMABAD, March 22: Pakistan is working on establishing specialized electricity tariffs to attract cryptocurrency mining and blockchain-based data centers, with the goal of utilizing surplus power at marginal costs while fostering growth in the digital asset industry.
Sources informed told media that the power division is consulting with various stakeholders to create an appealing tariff structure for these emerging sectors.
Importantly, the plan does not involve subsidies but aims to absorb surplus electricity and reduce capacity payments.
Current estimates suggest that bitcoin miners spend as much as 60-70% of their earnings on electricity, making Pakistan’s abundant surplus electricity an attractive opportunity.
However, ensuring a stable power supply will be critical for the success of this plan.
Globally Bitcoins Known for Energy-Intensive Process
Globally, bitcoin mining is known for being an energy-intensive process.
It is estimated to consume over 130 terawatt-hours (TWh) of electricity annually, surpassing the total power consumption of countries like Argentina or the Netherlands.
In response to this high demand, some countries have introduced specialized tariffs for crypto mining or taken a more stringent approach.
Also Read: Finance Minister to Chair Pakistan Crypto Council (PCC) to Regulate Digital Assets
For instance, China, once a leading hub for bitcoin mining, banned the industry in 2021 due to environmental concerns and power shortages.
Iran offers subsidized electricity for mining but often shuts down operations during peak consumption periods, while Kazakhstan initially welcomed crypto mining before imposing higher electricity tariffs and taxes amid rising energy shortages.
On the other hand, El Salvador, the first country to adopt bitcoin as legal tender, uses low-cost geothermal energy from volcanoes for mining.
Pakistan Crypto Council and Strategic Discussions
Sources also revealed that Power Minister Awais Leghari and Bilal Bin Saqib, the newly appointed chief executive of the Pakistan Crypto Council (PCC), have recently discussed the potential benefits of utilizing Pakistan’s surplus electricity for crypto mining.
This conversation was part of a larger strategy to turn the country’s excess energy into a valuable asset by attracting global crypto miners.
The PCC held its inaugural meeting on Friday, which was chaired by Finance Minister Muhammad Aurangzeb.
During the session, Mr. Saqib presented the idea of leveraging Pakistan’s surplus electricity for bitcoin mining.
An official statement highlighted that the concept could transform Pakistan’s current liabilities into valuable assets, contributing to economic growth.
Read More: Pakistan to Legalize Crypto for Foreign Investment Boost
The meeting was attended by prominent figures, including State Bank Governor Jameel Ahmad, Securities and Exchange Commission of Pakistan Chairman Akif Saeed, and federal secretaries from the IT and law ministries.
Key points of discussion included Pakistan’s untapped potential in the cryptocurrency sector and the challenges preventing broader adoption of digital currencies.
Mr. Saqib emphasized the importance of regulatory clarity, which would allow the country to unlock the full potential of this rapidly growing industry.
The Finance Minister highlighted the pivotal role of the PCC in shaping Pakistan’s future in the digital asset space.
He expressed hope that the council would serve as an umbrella organization, uniting all stakeholders and regulatory bodies to collaboratively establish a comprehensive and forward-looking 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 positions Pakistan as a leader in emerging technologies,” the finance minister stated.
The meeting also focused on the need to learn from global best practices and adapt them to Pakistan’s unique context.
The council agreed to build on the existing work done by various entities and groups, leveraging their collective knowledge.
The discussions emphasized the importance of a well-defined regulatory framework, legislation, and licensing regimes for consumer protection, blockchain mining, and a national blockchain policy.
Also Read: Pakistan Crypto Council Holds First Meeting to Shape Blockchain Future
Additionally, the council underscored the need for pilot programs, careful sequencing of initiatives, and adherence to international obligations to ensure the success of Pakistan’s crypto industry.
Through these strategic discussions, Pakistan aims to become a key player in the global crypto space while responsibly managing its resources and regulatory environment.
