Qudsia Bano

Pakistan has launched an ambitious initiative to establish Bitcoin mining facilities and AI data centres, aiming to monetise surplus electricity, attract foreign investment, and accelerate digital transformation. The move is led by the Pakistan Crypto Council (PCC), a government-backed body under the Ministry of Finance, and is seen as a strategic step toward building a digital economy.

Finance Minister Muhammad Aurangzeb has said that the initiative marks a turning point for Pakistan, enabling the conversion of underutilised energy into a revenue-generating asset. “By redirecting idle power capacity to high-demand digital applications, the government aims to create thousands of jobs, improve foreign exchange inflows, and enhance technological capacity across sectors.”

Muhammad Faizan Qureshi, Chief Investment Analyst at Insight Capital Pakistan, views the decision as timely and aligned with global market trends. He said that the shortage of data infrastructure worldwide has created a unique opportunity for countries like Pakistan. "With competitive electricity rates and available land, Pakistan can become a serious player in attracting tech-based foreign direct investment.

If the regulatory framework remains investor-friendly, we could see inflows of over $5 billion in the medium-term." Saad Mehmood, Head of Technology and Innovation at AwanTech Solutions, echoed similar sentiments. He noted that the establishment of local AI data centres would reduce dependency on foreign cloud services and create opportunities for homegrown digital development.

"This initiative could be a turning point for Pakistan’s digital services industry. With proper execution, it will not only improve data sovereignty but also drive skill development in AI, data science, and cybersecurity." However, experts have also flagged several risks. Regulatory uncertainty remains a significant concern, as Pakistan has yet to finalise a comprehensive legal framework for cryptocurrency operations. Inconsistent policies could deter international partners and investors.

Energy allocation is another critical issue. While the government plans to use excess electricity from underperforming plants, there are fears that shifting energy to crypto mining might affect supply stability, especially in regions already experiencing power outages. Environmental impact is also under scrutiny. Bitcoin mining consumes large amounts of electricity, and without a clear transition plan to renewable sources, the initiative may clash with Pakistan’s climate goals.

To address these concerns, stakeholders are calling for transparent regulations, environmental safeguards, and integration of renewable energy. The Finance Division has hinted at future phases powered by wind, solar, and hydro energy, as well as potential tax incentives and partnerships with international blockchain and AI firms.

With over 40 million crypto users, a large young population, and strengthened digital connectivity through the Africa-2 submarine cable, Pakistan stands at the threshold of becoming a regional hub for digital innovation. Whether this potential is realised will depend on the government’s ability to implement the plan effectively while managing its associated risks.

Credit: INP-WealthPk