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IMF Casts Doubt on Pakistan's Ambitious Bitcoin Mining Initiative

The International Monetary Fund (IMF) has expressed serious concerns over Pakistan's plan to allocate 2,000 megawatts of power for Bitcoin mining and AI operations.

This initiative aims to position Pakistan as a hub for cryptocurrency and blockchain technology amidst ongoing financial negotiations with the IMF.

However, the IMF has flagged potential legal ambiguities and the sustainability of power allocations given the country's chronic energy shortages.

Officials have pointed out that mining one Bitcoin in Pakistan could cost up to $132,000 due to high electricity rates, although a subsidized rate of $0.09/kWh has been proposed.

Despite Pakistan's intentions to attract foreign investment and promote digital finance, the lack of consultation with the IMF raises significant red flags.

The newly formed Pakistan Digital Asset Authority (PDAA), which is intended to regulate crypto activities, is under scrutiny for its legal foundations.

Experts warn that without a comprehensive overhaul of infrastructure and energy pricing, Pakistan's ambitious Bitcoin mining strategy could lead to further economic distress.

IMF representatives are expected to delve deeper into the government's electricity plan in upcoming virtual discussions.

The government's recent announcement of a national Bitcoin wallet and the strategic reserve has also drawn attention as Pakistan navigates its crypto landscape.

Ultimately, while the aspirations to embrace digital assets are evident, the execution may need much more stability and clarity to succeed.