PHMA slams plan of distributing 2,000MW power to Bitcoin mining
LAHORE: The government's proposed plan of distributing 2,000 megawatts of excess power to Bitcoin mining and artificial intelligence (AI) data centers has faced harsh resistance from industrialists, merchants, and farmers, who contend that the power should be distributed among productive sectors to increase employment and economic growth.
Sardar Usman Ghani, Central Chairman of the Pakistan Hardware Merchants Association, expressed serious reservations about the decision, saying that making available cheap electricity to a 'non-productive, speculative industry' is not justifiable when industry, agriculture, and labour-intensive industries are facing an energy crunch. It is shocking to learn that the government plans to export excess electricity to speculative activities such as Bitcoin mining rather than encouraging the productive industries' Ghani informed Business Recorder.
'The decision will not create jobs or drive actual economic growth. It will just promote a privileged group at the expense of industries, traders, farmers, and workers,' he added.
The row is based on the government's alleged talks with Bitcoin miners and AI companies to provide them with electricity at subsidised tariffs to leverage surplus power generation capacity. Critics, however, say Pakistan's persistent energy shortfalls make such an allocation irresponsible, especially when industrial and agricultural sectors suffer intermittent outages.
Industrialists and economists have raised questions regarding the economic logic of the decision, pointing to the specious nature of crypto currency markets. Bitcoin mining is extremely power-guzzling, and with electricity costs accounting for a large percentage of operating costs, critics say that the government stands to incur massive losses if prices of crypto currencies plummet.
Additionally, the opacity in tariff fixation and the void of a proper regulatory structure for crypto currencies have further acted as repellents. The International Monetary Fund (IMF) has also asked for explanations from Pakistani officials, requesting information on electricity tariffs and the legal status of crypto mining. Virtual talks between Pakistani authorities and the IMF will soon be initiated to sort these issues out.
Usman Ghani said that industrial sector of Pakistan has been known to face an unreliability of power supply, and allocating 2,000 MW for Bitcoin mining might be doing it harm. Business owners contend that giving higher preference to speculative activities over manufacturing, agriculture, and small business hampers the allocation of resources, which could dampen sector growth in areas generating jobs.
Copyright Business Recorder, 2025
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