IMF Rejects Pakistan’s Plan To Subsidize Power For Crypto Mining, Cites Market Destabilization Concerns

Key Points

1. The IMF rejected Pakistan's plan to subsidize electricity for crypto mining and AI sectors, arguing it could destabilize the market and create imbalances.

2. Pakistan proposed a marginal cost tariff of PKR 22-23 (~$0.80) per kWh for industries like crypto mining, but the IMF opposed it.

3. The IMF compared Pakistan's energy plan to sector-specific tax breaks that have historically caused market distortions.

4. Pakistan's Power Division and Crypto Council (PCC) aimed to utilize surplus energy for crypto mining, but the IMF raised concerns over pricing mechanisms.

5. Despite Pakistan's efforts to position itself as a crypto hub, the IMF's rejection highlights regulatory and economic challenges in implementing such initiatives.