IMF Rejects Pakistan’s Plan to Subsidize Electricity for Bitcoin Mining
The International Monetary Fund (IMF) has rejected Pakistan's proposals for subsidized electricity for bitcoin mining and other energy-intensive industries. Key points include:
- IMF expressed concerns over market distortions during a Senate session.
- Pakistan planned to allocate 2,000 MW from a surplus of 7,000 MW at rates of 23-24 Pakistani rupees ($0.08) per kWh.
- IMF cautioned that such subsidies resemble tax holidays that could undermine market efficiency.
- Concerns were raised about transitioning back to market rates after the subsidy period.
- The initial six-month tariff package was reduced to three months under IMF pressure.
- Subsequent subsidy proposals have also been rejected.
- Discussions are ongoing with international institutions to refine the plan.
- The government aims to establish a strategic bitcoin reserve and enhance access to financial tools for the unbanked population.
Statements from government officials highlight the belief in crypto and blockchain as tools for economic advancement.