Report suggests Pakistan considers crypto mining for excess electricity use

Pakistan is formulating specialized electricity tariffs to draw in cryptocurrency mining operations, aiming to utilize the nation's surplus power generation capacity.

As stated in a Dawn report, the Power Division is collaborating with various stakeholders to establish appealing electricity rates for such industries, without providing subsidies. This endeavor aims to utilize surplus power production and decrease capacity payments.

This tactic may prove enticing to cryptocurrency miners, who typically allocate 60-70% of their earnings towards electricity costs. Pakistan's current surplus electricity situation presents potential competitive benefits.

Power Minister Awais Leghari recently held a meeting with Bilal Bin Saqib, the chief executive of the newly established Pakistan Crypto Council (PCC), to discuss the prospects of global crypto miners capitalizing on Pakistan's surplus electricity. This was followed by the PCC's inaugural meeting, chaired by Finance Minister Muhammad Aurangzeb and attended by major financial regulators.

During the meeting, Saqib outlined a vision for "harnessing Pakistan's surplus electricity for Bitcoin (BTC) mining, potentially transforming the country's liabilities into assets."

The council discussed Pakistan's unexplored potential in the cryptocurrency sector. They also pinpointed regulatory clarity as a vital prerequisite for realizing the sector's full potential.

The council reached an agreement to adopt global best practices, while ensuring that business and revenue models are tailored to local conditions. They also addressed the development of regulatory frameworks, legislation, and licensing systems for consumer protection, blockchain mining, and a national blockchain policy.

Pakistan's strategy towards cryptocurrency mining emerges as various countries have adopted diverse approaches to the energy-intensive industry. China, formerly the global center for Bitcoin mining, prohibited the practice in 2021, citing environmental concerns and power shortages.

Kazakhstan initially welcomed crypto mining but later enforced higher electricity tariffs and taxes due to energy shortages. El Salvador, the first country to recognize Bitcoin as legal tender, provides miners with affordable geothermal energy sourced from volcanoes.