Govt to allocate 2,000MW for crypto mining, AI data centres

The federal government has decided to allocate 2,000 megawatts of power for the purposes of crypto mining and to power artificial intelligence data centers. As per a press release, the measures are part of the first phase of a national initiative to establish Pakistan as a leader in digital innovation.

According to reports, the Pakistan Crypto Council (PCC) is leading the initiative to utilise surplus power. The integration of digital assets into Pakistan's economic structure could result in the creation of high-tech jobs while potentially boosting foreign direct investment (FDI) levels.

Reports suggest that the FDI might grow by billions of dollars, along with the federal government witnessing a sizable surge in revenue as well. The press release cites Finance Minister Muhammad Aurangzeb, who outlines that this allocation of excess power will translate into investments and innovation.

Details from the press release suggest that lawmakers in Islamabad intend to utilise Pakistan’s strategic location to its benefit, as Pakistan possesses “the most strategic location in the world for data flow and digital infrastructure”. This could allow Pakistan to become a hub for global data centres.

As per reports, a number of international entities have engaged with authorities for exploratory discussions. These ‘entities’ include data infrastructure firms and crypto miners.

The PCC has been attracting companies to invest in the country, and as per the press release, the announcement of allocating excess power towards digital assets could result in capturing the interest of international entities, resulting in the visit of additional “global players”. The reason for anticipating the aforementioned visits stems from what the press release describes as excess power being “repurposed into a high-value digital asset”.

Currently, several power plants in Pakistan are operating below capacity, causing them to be a liability. However, since crypto mining and AI data centres consume large amounts of electricity, redirecting excess power could eliminate these liabilities while simultaneously generating revenue.

Crypto mining at large is an extremely electricity-intensive operation. Reports place the annual electricity consumption of global mining operations at a staggering 130 terawatt-hours (TWH). 

For perspective, the electricity consumption for overall mining operations is so large that it dwarfs even the power consumption of advanced economies, such as the Netherlands. Owing to its electricity-intensive nature, many countries have instated bans on bitcoin mining to combat local power deficits and rising environmental issues.

In 2021, China officially cracked down on their domestic bitcoin mining industry by banning the activity altogether. However, with Pakistan embracing the crypto wave and the crackdown other countries have imposed on their crypto systems, investments could pour in.

PCC Chief Executive Officer (CEO) Bilal Bin Saqib has outlined how "Pakistan can accumulate Bitcoin directly into a national wallet”. Power sold to miners in exchange for Pakistani rupees could pave the way for the generation of valuable digital assets, leading to “economic stability”.