From mining real gold to digital gold

In March 2022, Pakistan made headlines when Mark Bristow signed a landmark agreement to launch the country's largest-ever copper and gold mining project—a symbol of traditional resource extraction. Three years later, in March 2025, a new frontier emerged with the formation of the Pakistan Crypto Council (PCC), aiming to mine a different kind of gold: digital. From proposals to use idle electricity for crypto mining to controversial links allegedly aimed at attracting US President Donald Trump's attention, Pakistan's crypto ambitions have taken on a complex and politically charged tone.

Currently, cryptocurrencies are banned in Pakistan, as confirmed by officials from the State Bank of Pakistan (SBP) and the Ministry of Finance during a recent National Assembly Standing Committee on Finance meeting. The SBP, in multiple statements, has reiterated that trading, holding, or promoting cryptocurrencies violates domestic law. Citing concerns over capital flight, money laundering, and terrorist financing, the SBP has warned financial institutions against engaging in crypto-related activities.

In early 2025, the finance ministry echoed these concerns, calling crypto ventures "misaligned with national economic goals." This has created internal contradictions, as other government bodies appear to be exploring crypto integration through unofficial channels. Until there is regulatory clarity—preferably through legislation or a policy framework—Pakistan remains a high-risk jurisdiction for any legitimate crypto activity.

The Pakistan Crypto Council (PCC) emerged in early 2025 as a private initiative with lofty ambitions. Branded as an innovation-driven entity, the PCC has signed non-binding agreements with international partners to promote blockchain use in Pakistan. However, many of these agreements and the entities involved have been criticised in both mainstream and social media for lacking transparency.

A major event triggering scrutiny was the visit of Binance founder Changpeng Zhao (CZ) to Pakistan. Convicted in the US in November 2023 for violating anti-money laundering laws, CZ's company also paid a record $4.3 billion penalty. His visit, reportedly facilitated by PCC intermediaries, was viewed by analysts as tone-deaf and damaging to Pakistan's international image.

Adding a geopolitical dimension is PCC's recent Letter of Intent with World Liberty Financial (WLF), a US-based crypto company in which the Trump family reportedly holds a 60% stake. The agreement proposes collaboration on blockchain, stablecoin, and decentralised finance projects in Pakistan.

Critics argue that the move is less about technology and more about political manoeuvring—an effort to curry favour with Donald Trump. The involvement of Steve Witkoff, a Trump ally now serving as a US special envoy, has further fuelled speculation of backdoor diplomacy disguised as financial innovation. Pakistan has over 10,000 MW of excess power generation capacity due to over-commitment in generation contracts and under-utilised industrial demand. But this surplus comes at a steep cost. Electricity remains expensive—10 to 15 cents per kWh for industrial users—making it non-viable for crypto mining, which thrives on rates below 5 cents per kWh in places like Venezuela, Kazakhstan, and Ethiopia.

While crypto mining could monetise some of this idle capacity, alternative uses offer better long-term value. Industrial and Special Economic Zones (SEZs) can justify higher tariffs through job creation and exports. Green hydrogen targets premium markets, while data centres and IT parks generate high income per energy unit. Cold storage facilities for agriculture are crucial for exports and reducing food waste. EV infrastructure can help lower fuel imports while promoting sustainability.

If the government is considering subsidised energy for crypto mining to attract global miners, then why not do the same for these sectors? These alternatives maximise economic utility by pairing energy use with employment, export potential, and long-term gains. In contrast, crypto is volatile and speculative, potentially locking Pakistan into low-return ventures while sidelining more transformative opportunities.

Amid rising interest in cryptocurrency, Pakistan's consideration of Bitcoin as a strategic reserve is fraught with significant risk. While countries like El Salvador have recently profited from such investments, Pakistan's volatile economy, regulatory vacuum, and legal bans make this approach dangerous. The IMF has already raised concerns over subsidised power tariffs. Meanwhile, any move to build Bitcoin reserves—especially from confiscated assets—could provoke renewed scrutiny from the FATF, jeopardising Pakistan's progress in exiting the grey list.

With limited reserves and a fragile economy, adopting crypto as a reserve asset may seem reckless. Instead, Pakistan must focus on financial stability and regulatory clarity, rather than speculative digital ventures.

Ultimately, the question isn't whether Pakistan can enter the crypto economy, but whether it should—and to what extent. In the absence of clear regulation, public consensus, and a sound economic rationale, the pursuit of crypto mining may cost more than it offers. As the world moves toward regulated, sustainable digital finance, Pakistan must decide whether chasing crypto-mining under uncertain pretences is worth the price of strategic credibility.

THE WRITER IS A FINANCIAL MARKET ENTHUSIAST AND IS ASSOCIATED WITH PAKISTAN'S STOCKS, COMMODITIES AND EMERGING TECHNOLOGY