In a groundbreaking move, Pakistan and El Salvador have initiated their first official bilateral collaboration, with a primary focus on the realm of cryptocurrency. A meeting took place between Bilal Bin Saqib, Pakistan's special assistant to the prime minister for crypto and blockchain, and El Salvador's President Nayib Bukele in San Salvador, aiming to forge a knowledge-sharing partnership centered on digital currencies. This development signifies a significant shift for Pakistan, which has only recently begun to embrace the world of crypto.
The country has been exploring the use of surplus energy from coal-fired power plants for bitcoin mining since May and has also been in discussions with Michael Saylor to examine the potential role of cryptocurrency in its sovereign reserves. Notably, Pakistan is pursuing this crypto integration despite being under the financial oversight of the International Monetary Fund, which had previously rejected a proposal to provide subsidized power for bitcoin mining.
The country is planning to establish a bitcoin reserve and has allocated 2,000 megawatts for mining purposes. Furthermore, a new regulatory body, the Pakistan Digital Assets Authority, was set up in May to oversee the burgeoning domestic crypto economy. According to Saqib, approximately 15 to 20 million Pakistanis are already invested in cryptocurrency.
El Salvador, having been the first nation to adopt bitcoin as legal tender in 2021, has continued to purchase bitcoin despite the IMF's disapproval, with a publicly disclosed reserve exceeding 6,200 BTC, valued at around $745 million. Saqib praised Bukele, describing him as a forward-thinking leader who demonstrated conviction in his support for bitcoin.
Pakistan secured a $7 billion loan from the IMF last year, which requires stringent fiscal reforms until 2027. Nevertheless, the country is pushing forward with its plans to integrate cryptocurrency into its financial system.