Pakistan eyes surplus power use for crypto mining: report

Pakistan is developing special electricity tariffs to attract cryptocurrency mining operations as part of a strategy to use the country’s surplus power generation capacity.

According to a report by Dawn, the Power Division is consulting with various stakeholders to create attractive electricity rates for these industries without introducing subsidies. The initiative plans to use excess power production while reducing capacity payments.

This approach could appeal to cryptocurrency miners, who generally spend 60-70% of their earnings on electricity costs. Pakistan’s current surplus electricity situation offers potential competitive advantages.

Power Minister Awais Leghari recently met with Bilal Bin Saqib, chief executive of the newly formed Pakistan Crypto Council (PCC), to discuss opportunities for global crypto miners to leverage Pakistan’s excess electricity. This was followed by the PCC’s inaugural meeting chaired by Finance Minister Muhammad Aurangzeb and attended by key financial regulators.

Pakistani council discusses crypto potential

During the meeting, Saqib presented a vision for “leveraging Pakistan’s surplus electricity for Bitcoin (BTC) mining, potentially turning the country’s liabilities into assets.”

The council discussed Pakistan’s untapped potential in the cryptocurrency space. They also identified regulatory clarity as a key requirement for unlocking the sector’s full potential.

The council agreed to learn from global best practices while ensuring business and revenue models are adapted to local conditions. They also discussed the development of regulatory frameworks, legislation, and licensing regimes for consumer protection, blockchain mining, and a national blockchain policy.

Pakistan’s approach to cryptocurrency mining comes as various countries have taken different approaches to the energy-intensive industry. China, once the global hub for Bitcoin mining, banned the practice in 2021, citing environmental concerns and power shortages.

Kazakhstan initially welcomed crypto mining but later imposed higher electricity tariffs and taxes due to energy shortages. El Salvador, the first country to adopt Bitcoin as legal tender, provides miners with low-cost geothermal energy from volcanoes.