Pakistan plans to use surplus energy to power cryptocurrency mining and new AI data centers. It comes just as its global connectivity improves. This article explores how this has come to be and how it will impact the country.
The government of Pakistan has announced that it plans to allocate 2,000 megawatts of electricity to the process of Bitcoin mining and the building of new AI data centers. The national initiative was announced by the finance ministry this week. It will do so using the surplus energy from its capital Islamabad.
Pakistan’s Surplus Energy Requirements
Energy in Pakistan is a hot topic. The country has a surplus generation capacity but also suffers from high tariffs. To offset these high costs, many have turned to solar power and renewable alternatives. Thus, the production and purchase of energy is not centralized and can be wasteful.
It plans to use this to create Bitcoin will be overseen by a new regulatory body known as the Pakistan Crypto Council. It is part of a wider scheme in which the excess energy in the country can be monetized. This will see an increase in its digital infrastructure rollout across several phases. The hope is that this will create jobs and attract investment, making the country a leader in digital innovation.
Bitcoin has recently soared in value due to improving global economic conditions. Last week, it climbed above the $111,000 mark, almost reaching $112,000. This set a new high for the cryptocurrency. The Bitcoin price today stands at $109,593, up from the weekend when profit-taking and sell-offs led to a decrease in its value. Further profit-taking could see a repeated price rejection, but with the right current events, it could soar back up.
Senator Muhammad Aurangzeb, the Minister of Finance, explained that he believed this marks a pivotal moment in Pakistan’s digital transformation journey. It can help unlock the country’s economic potential, changing the country’s surplus power into revenue, investment, and innovation. He also added the need for correct regulation and said that the country can generate foreign income in the form of USD through Bitcoin mining.
Geographically, Pakistan is at a distinct advantage for this, being sandwiched between the east and west. This makes it a great place for data centers, and for this reason, there have already been high levels of interest from international parties, including Bitcoin miners and data center providers. There have been similar efforts in neighboring countries, such as Singapore and India. However, these countries suffer from rising energy costs and a lack of land, a problem endemic to Bitcoin miners around the world.
The Africa-2 Cable Project
The opportunity for Pakistan comes at a time when they have also just improved connectivity. The 45,000-kilometre Africa-2 cable project has arrived in the country, increasing connectivity across 33 different countries.
A wealth of high-profile backers have helped make this project come to life. They include Meta, Vodaphone, Telecom Egypt, and the West Indian Ocean Cable Company amongst others. Created by Alcatel Submarine Networks, it will connect the east of Europe with the Middle East via Saudi Arabia, and Africa.
New countries and jurisdictions are being added to the cable every few months. In February, Greece was added via its landing based in the southern part of Crete. This followed a connection to the India-Europe-Xpress cable, which links Mumbai to Europe.
The Legality of Cryptocurrency Mining
As a fairly new practice, many countries have still to create laws regarding the use of cryptocurrency mining. Some, such as China, quickly moved to ban it outright. Yet others have a relaxed approach or one that is still developing. In the United Kingdom, it is legal, but high energy prices and a lack of land make it hard to be profitable in the current climate. In the United States it is also legal, but governed at both the state and federal level. This can mean varied laws on taxation and what can and can’t be done.
Some countries, such as Bhutan, have used their natural resources to fund cryptocurrency mining projects. As a mountainous kingdom rich in hydroelectric power, they have harnessed this energy to make Bitcoin and other cryptocurrencies. New laws then put this back into the civil service, in a bid to stop workers going abroad to seek higher wages. However, there is a vast difference between Bhutan and Pakistan, namely the 247 million people who live in the latter.
This will present Pakistan with a wealth of opportunity. It may decide to open up reserves, as has been seen in the United States. However, it must use its energy wisely. It is not the only country with an energy surplus, and many in Africa have already begun to do the same. It will take a well-planned operation across different sectors to ensure it comes to fruition.