Author: Ibraheem Sohail

In a bid to integrate digital assets into the formal economic structure of the country, the Pakistan Crypto Council (PCC) has revealed Pakistan’s first ever government-led Strategic Bitcoin Reserve. According to reports, PCC Chief Executive Officer (CEO) Bilal Bin Saqib made the announcement during a keynote speech at Bitcoin Vegas 2025 in Las Vegas, United States.

The PCC CEO delivered his speech to a crowd including high profile attendees such as United States Vice President JD Vance, Donald Trump Jr and Eric Trump. Reports reveal that the PCC’s CEO is attempting to garner investment inflows into domestic crypto markets.

He outlined the intentions behind creating a crypto wallet, highlighting how holding digital assets by the state was “not for sale or speculation, but as a sovereign reserve signalling long-term belief in decentralised finance.” Pakistan’s move comes after the United States (US) created its own strategic reserve in early March 2025, upon the election of Donald Trump as President of the US.

He acknowledged taking inspiration from the United States in establishing the national wallet, stating, “We want to thank the United States of America again because we are getting inspired by them.” He also thanked US President Donald Trump for his commitment to adopt crypto.

However, he attempted to highlight Pakistan’s initiatives as well, mentioning how the federal government recently allocated 2,000 megawatts of surplus power to crypto mining and to power artificial intelligence data centers.

He also cleared Pakistan’s image which has been tarnished because of negative PR and media coverage by shining a positive light onto Pakistan. Reports indicate that he requested everyone to “look past the headlines” as it would allow them to see “talent, resilience, and vision.”

Moreover, in a statement issued by his office, he said that the country is “no longer defined by its past” and that ongoing advancements will transform Pakistan into a hub of digital innovation. He urged international crypto builders to bring their investments to Pakistan, stating, “If you’re building something real — come build it in Pakistan.”

He suggested that crypto builders could tokenize land and “build wallets for the unbanked”. If builders heed his advice, Pakistan could witness a sizable influx of foreign direct investment (FDI), to the tune of billions of dollars, along with a potential increase in employment opportunities.

During his speech at Bitcoin Vegas 2025, the PCC CEO revealed a blueprint which placed Pakistan “as a  tech-forward, youth-powered, and opportunity-rich nation ready to lead”.

Finance Minister Muhammad Aurangzeb has assured that the upcoming budget will offer some relief to the salaried class by shifting the tax focus towards sectors that operate outside of the formal economy. According to reports, in meetings held on Tuesday as part of pre-budget consultations, the finance minister outlined how this shift would come through stronger digitisation efforts and a move to limit cash transactions.

Reports indicate that over the past few days, the finance team met with a multitude of officials from banks, financial institutions, regulators, and representatives from industries like steel and ceramics. These meetings gathered input on policy decisions for the next federal budget, and as per reports, much of the focus remained on finding ways to capture undocumented economic activity.

A set of proposals was discussed that could reshape how cash is used in Pakistan’s economy. Some of the ideas included taxing large cash transactions, which incentivises digital payment methods, or, more seriously, even banning cash altogether in certain sectors that the Federal Board of Revenue (FBR) will identify. 

Karandaaz, Pakistan Revenue Automation Limited, and banks are all expected to play a part in supporting this effort. If implemented, it would allow for transactions to be documented in greater detail, reducing instances of tax evasion and money laundering.

Another meeting zeroed in on the push toward digital payments. Authorities intend to expand access to these services, especially for people who are currently left out. 

According to analysts, those left out of the digitisation process include small retailers and communities that still depend heavily on cash. Stakeholders said this transition can’t happen unless it becomes cheaper and easier to adopt digital options. 

Reports indicate that lowering costs for businesses that accept digital payments was described as a priority in discussions. As it stands, consumer transactions made via digital means are subject to lower General Sales Tax (GST) charges, which already makes cashless payments an attractive option. 

As per reports, the federal government also wants to make digital payment systems more compatible with one another. Platforms like Raast, which allow instant payments between banks, were outlined as a key building block to a system where people have more freedom to choose how they pay and who they bank with.

Officials reportedly stressed the importance of making digital payments not just available but attractive. That means changing how incentives are structured so that cash no longer seems like the simpler option. The overall goal is to level the playing field between digital and cash-based transactions.

The finance minister made it clear that moving away from cash is no longer just a policy goal, as he labelled it a necessary step for economic stability and long-term growth. In his words, building an inclusive and easy-to-use digital payments system is essential, and it needs to happen with speed and coordination.

The State Bank of Pakistan (SBP) has accumulated $5.9 billion from the currency market since the start of fiscal year (FY) 2024-25 by utilising stronger remittance inflows. According to reports, the SBP aims to build up its foreign exchange reserves even as it continues to receive financial support from the International Monetary Fund (IMF) and allied nations.

According to data compiled by a reputable domestic brokerage house, the SBP purchased a staggering $223 million in February alone. The total volume of market purchases during the first nine months of FY 2024-25 reportedly suggests that the SBP wants to accrue a respectable amount of reserves, which has caused analysts to outline how the SBP’s purchase of dollars in the aforementioned period might be the largest in recent history.

Despite these efforts, the SBP has fallen short of its reserves target. After initially forecasting modest inflows, the SBP revised its expectations upwards, setting a new goal of $14 billion in reserves while simultaneously projecting remittances to reach $38 billion by the end of FY25.

Following a $1 billion IMF disbursement received on May 16, SBP’s reserves rose to a respectable $11.5 billion. Reports claim that this figure indicates that nearly half of the reserve accumulation has come from dollar buying in the open market.

Currency dealers report that despite ample liquidity, the SBP has continued to restrict import activity. Pakistan’s trade deficit in April hit a new high, while FY 2024-25 also witnessed record-high profit repatriation by foreign companies.

For reference, repatriation of profits by foreign companies indicates a movement of funds out of the domestic market. Persistently high trade deficits and repatriation of profits abroad have reportedly pressured Pakistan’s external account.

At the same time, Pakistan is set to receive further external support. Reports reveal that a $1.4 billion inflow is expected under the IMF’s Resilience and Sustainability Facility. Moreover, the domestic financial sector claims that Pakistan has been successful in inking a $1 billion agreement with the United Arab Emirates (UAE), which will result in an inflow of funds likely in the coming weeks.

On the investment front, foreign direct investment during the first ten months of the fiscal year slightly lagged behind the previous year’s tally. However, analysts believe that a firm and strategic response to recent Indian aggression has helped Pakistan reassert its regional presence. Some see this as a potential catalyst for improved investor sentiment and renewed interest in long-term commitments to the country.

Automobile assemblers and spare part manufacturers alike have requested the federal government to provide clear policy guidelines regarding the reduction of import duties. According to reports, assemblers want the government to disclose this information to them prior to the announcement of the federal budget for Fiscal Year (FY) 2025-26.

Stakeholders in the domestic automotive sector met with Special Assistant to the Prime Minister, Haroon Akhtar Khan, to seek the government’s stance on upcoming policy changes. As per reports, the aforementioned stakeholders included representatives from the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM).

While a reduction in duties could help increase competition in the domestic market, authorities linked to the Ministry of Industries and Production and the Engineering Development Board (EDB) outlined how it could lead to a shift of focus away from domestic manufacturing in favour of imported cars.

Higher automotive imports could also result in a significant leakage of foreign reserves. The mechanism behind this is the State Bank of Pakistan’s managed float regime, which requires foreign exchange interventions to ensure the rupee does not depreciate significantly.

Domestic consumers would stand to benefit from such policies; however, the increase in competition could lead to a drop in car prices. Moreover, easing imports could also increase the array of choices available to those looking to purchase a vehicle.

The federal government intends to implement the National Tariff Policy (NTP) for 2025-30 from July 1. Reports indicate that the meeting between manufacturers and state officials falls under the umbrella of the NTP. 

The NTP aims to reduce regulatory duties while also abolishing additional customs duties in phases. This policy measure intends to simplify customs processes while also cutting down barriers to free trade.

Reports suggest that domestic automotive manufacturers seek duties on imported vehicles as the high cost of raw materials and electricity make it virtually impossible to compete, on price, with players such as China, Indonesia, India, Thailand and Vietnam.  

As per Paapam, operating domestic manufacturing units was not viable given the aforementioned challenges. Reports reveal that by 2030, import duties on industrial and auto machinery are expected to fall to around 15 percent, which has raised concerns in the auto sector. 

CBUs (completely built imported vehicles) currently face high taxes ranging from 50 percent to 100 percent. Similarly, local auto part manufacturers are protected by an 18 percent duty on imported CKD (completely knocked down) kits. 

During the meeting, Paapam reportedly cautioned the government, outlining how if CBUs are imported at just 15 percent duty, auto parts may also be imported at extremely low rates of around zero to 10 percent. This could detrimentally impact local manufacturers who rely on protective tariffs to stay competitive.

Finance Minister Muhammad Aurangzeb has indicated a potential relief in taxes for the salaried class. While speaking at an event, he stated that the federal budget for fiscal year (FY) 2025-26 will reduce the strain on salaried individuals.

The federal budget for the coming fiscal year will be presented on June 10. It merits a mention that the federal government was to announce the budget earlier. However, authorities chose to delay the announcement instead as discussions between Islamabad and the International Monetary Fund (IMF) remained inconclusive. 

As per reports, the government is attempting to “reduce the tax burden” on the salaried class. The finance minister indicated that Islamabad was working towards simplifying processes surrounding the filing of taxes for the salaried class. If taxes are slashed, it could increase the disposable income of households, resulting in an improvement in the purchasing power of households.

Moreover, he outlined the difficulties caused by automatic deductions in the salaries of the working class. The finance minister also highlighted how efforts are underway to digitise the Federal Board of Revenue’s (FBR) operations.

If successful, it could minimise the intervention of officials, thereby boosting transparency and faith in the tax collection process. Reports indicate that Islamabad is attempting to reform pension plans and intends to modernise debt management systems.

The finance minister emphasised the government’s commitment to supporting the armed forces, framing it as a national necessity rather than merely a military obligation. However, he highlighted how “no concrete announcement has been made regarding salary revisions”, leaving analysts wondering if civil-military personnel will witness increments in their pay for FY 2025-26. 

Speaking at the same event, the finance minister revealed how international players have started to recognise the trajectory Pakistan’s economy is on, with the speed of recovery leaving many stunned. 

“The world is satisfied with Pakistan’s macroeconomic stability,” he proclaimed, suggesting that all macroeconomic indicators are moving in the right direction. He revealed how 24 state-owned enterprises had been passed off to the Privatisation Commission, which could result in cutting off loss-making institutions while simultaneously generating revenue for the federal government.

According to reports, lawmakers in Islamabad are likely to introduce reforms that will transform the energy sector and the system for taxation, improving Pakistan’s fiscal position. The energy sector has already begun to undergo reforms, notably the repurposing of excess electricity for crypto mining and AI data centres.

Pakistan has reportedly received positive feedback regarding the direction of its economy during meetings with the United States (US) and the United Kingdom (UK) based investors.

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”.

The Power Division has asked the Ministry of Finance to recover around Rs161 billion in unpaid electricity bills from provincial governments, according to Power Minister Sardar Awais Leghari. 

As per reports, while speaking during a Senate Standing Committee on Power meeting, Awais Leghari outlined how the Council of Common Interests (CII) had already approved a mechanism. Under this mechanism, the federal government can deduct 25 percent of the outstanding dues directly from the provinces’ shares, while the rest would be recovered once bills are reconciled.

Reports indicate that the committee, chaired by Senator Mohsin Aziz, was briefed regarding these unpaid bills that had piled up over the last three years mainly due to the provinces’ unwillingness to cooperate in reconciling the figures. Data from reports suggests that Sindh owes a staggering Rs67 billion followed by Punjab and Balochistan at Rs42 billion each.

Khyber Pakhtunkhwa owes Rs10 billion as well. The panel showed strong dissatisfaction with the delays and demanded urgent action to recover the dues.

Back in February 2014, the CII had already settled the framework for how such payments would be handled, including the principle of deducting dues directly from the provinces’ federal transfers. This was followed by a detailed meeting in August 2014 with all stakeholders in the Ministry of Finance, where SOPs were finalized. Since then, the federal government has been deducting 25% of pending power sector payments at source using a uniform process.

Reports reveal that in addition to recoveries, the committee also turned its attention to ongoing efforts to privatise several power sector entities. Leghari confirmed that three distribution companies, namely Iesco, Fesco, and Gepco, are up for privatization in the first phase. 

Lesco, Mepco, and Hesco will follow in the next phase, along with the Guddu and Nandipur power plants. Investor outreach, restructuring efforts, and promotional roadshows are currently in progress, with the entire process expected to wrap up by January 2026.

According to reports, the committee voiced concern over what this shift means for employees of these companies. It urged the ministry to come up with fair and worker-friendly policies, including options for voluntary early retirement, to protect workers’ rights during the transition.

Another key issue raised was the high cost of electricity during peak nighttime hours. Reports reveal that Leghari has attributed  this spike results from reliance on expensive Residual Fuel Oil (RFO)- based generation to meet demand. The committee was unimpressed and pushed for a shift toward more efficient and affordable power plants to ease the burden on consumers.

Meanwhile, the installation of 800,000 Advanced Metering Infrastructure (AMI) meters across Islamabad, Rawalpindi, and Taxila has already been completed. This move has helped reduce line losses by 2%, offering a glimpse into how technology can play a role in addressing some of the power sector’s chronic inefficiencies.