Pakistan’s Crypto Chaos: Bitcoin Hopes, IMF Warnings & Policy Flip Flop- Explained

Pakistan has once again landed in a familiar loop of conflicting official statements. "Victim of bad PR"—that’s how Bilal bin Saqib, CEO of Pakistan’s Crypto Council, described his country and Bitcoin during his address at the annual global cryptocurrency conference in Las Vegas. But it took less than 24 hours for netizens to point out why the moment felt more like an embarrassment rather than just 'Bad PR'.

While Pakistan made headlines abroad with the announcement of its first Strategic Bitcoin Reserve, the reality back home told a different story. On Thursday, both the State Bank of Pakistan (SBP) and the Ministry of Finance (MoF) reaffirmed that cryptocurrency remains banned in the country.

While Finance Secretary Imdadullah Bosal did attempt to clarify the government’s stance on digital currency, it came across more like a damage control move. According to a recent report by Dawn, Bitcoin is not a legal tender in the nation, however, that didn't stop Islamabad from painting a completely different picture of its stance in Las Vegas.

"There will be a legal framework only when the government formally takes a decision, but the current legal status is that crypto is not a legal tender in Pakistan," Bosal said as per a report by the Dawn. Following the conflicting stances, members of the National Assembly's Standing Committee openly called out the government’s flip-flopping statement on the policy front.

Undoubtedly, Pakistan’s recent move might have been an attempt to woo the US administration and gain some brownie points for its image on the global stage. However, the contradictory messaging did more harm than good. Even the IMF has now raised concerns over Pakistan’s ambitious cryptocurrency plans.

IMF Raises Red Flags

Just last week, Pakistan stated that the nation will allocate 2,000 megawatts (MW) of electricity as part of its national plan to promote Bitcoin mining and AI data centres. And, while the ambition is to power the plan using surplus electricity, it is worth mentioning that Islamabad is currently facing heightened challenges in the energy sector, including high electricity tariffs.

The International Monetary Fund has reportedly raised concerns over the nation's Bitcoin mining ambitions, citing the need for clarity. This comes at a time when the country is already grappling with major power blackouts. Despite the power surplus, poor governance and obsolete policies have plagued Pakistan's energy sector.

“There is a fear of further tough talks from the IMF on this initiative,” an official involved in the negotiations reportedly told Samaa (a Pakistan-based media channel). “The economic team is already facing stiff questions, and this move has only added to the complexities of the ongoing talks.”

While Pakistan's Bitcoin dream might still be alive in Las Vegas, a series of flip-flopping stances and IMF's recent red flags demand a reality check.