Pakistan Explores Crypto Cooperation with El Salvador & Launches PVARA

Pakistan is strategically engaging with El Salvador on cryptocurrency collaboration, signaling a notable shift in its approach to digital assets amidst significant domestic adoption and ongoing economic challenges. This diplomatic initiative underscores the growing intersection of national policy and the evolving digital economy, even as Pakistan navigates a critical financial program with the International Monetary Fund (IMF).

• Pakistan is actively pursuing cryptocurrency cooperation with El Salvador.
• The Pakistan Virtual Assets Regulatory Authority (PVARA) was officially launched in July 2025 to oversee digital asset services.
• An estimated 15 million to 20 million Pakistanis are involved in cryptocurrency trading.
• Pakistan has allocated 2,000 megawatts of electricity for Bitcoin mining and plans a national Bitcoin reserve.
• The nation is currently operating under a substantial $7 billion IMF program, with the IMF expressing concerns over potential energy policy distortions related to crypto mining.
• Pakistan faces a projected need for over $100 billion in external funding by 2029 to address budget deficits.

Pakistan’s Diplomatic Push in Digital Assets

The recent discussions in San Salvador between Bilal Bin Saqib, Chief Executive of the Pakistan Crypto Council, and El Salvador’s President Nayib Bukele, mark a pivotal moment in Pakistan’s digital asset strategy. Confirmed by The Bitcoin Office on X (formerly Twitter), this meeting aimed to foster crypto cooperation and highlights Pakistan’s burgeoning interest in integrating digital currencies into its economic framework. This engagement is particularly noteworthy as Pakistan operates under a substantial $7 billion IMF program, initiated in 2024 and extending through 2027. El Salvador, a global pioneer in national Bitcoin adoption, has also faced scrutiny from the IMF regarding its substantial Bitcoin holdings, which stood at 6,238 Bitcoin, valued at approximately $745 million, as reported by Bloomberg in April.

Domestic Crypto Landscape and Energy Ambitions

Domestically, Pakistan has witnessed substantial grassroots adoption of cryptocurrencies, with estimates by Saqib suggesting that between 15 million and 20 million Pakistanis are actively involved in digital currency trading, despite prior central bank warnings regarding market volatility. To harness this growing activity, the nation has earmarked 2,000 megawatts of electricity specifically for Bitcoin mining operations and announced intentions to establish a national Bitcoin reserve. However, these ambitious energy policy shifts are under close watch by the IMF. Fakhre Alam Irfan, Pakistan’s Power Secretary, indicated that the IMF has expressed concerns that preferential electricity rates for crypto miners could potentially distort the country’s energy market and exacerbate existing vulnerabilities. This scrutiny is significant, especially given the nation’s reliance on IMF approval for major energy policy changes under its current facility.

Formalizing the Virtual Asset Economy: PVARA

In a significant stride towards formalizing its digital asset landscape, Pakistan officially launched the Pakistan Virtual Assets Regulatory Authority (PVARA) in July 2025. This newly established authority is mandated to license and oversee a wide array of virtual asset services, including exchanges, digital wallets, and stablecoins. This crucial regulatory development follows an April 2025 Letter of Intent between the Pakistan Crypto Council and World Liberty Financial, a firm notably supported by President Donald Trump. This agreement aims to accelerate blockchain adoption through pilot regulatory sandboxes and stablecoin initiatives, signaling a multi-pronged approach to deeper digital economic integration.

Navigating Economic Challenges with Digital Innovation

Amidst these advancements in its digital asset strategy, Pakistan continues to confront pressing financial needs. Despite successfully averting a sovereign default in 2023, the IMF projects the country will require over $100 billion in external funding by 2029 to address persistent budget and balance-of-payments deficits. The nation’s strategic pivot towards digital assets, exemplified by its proactive engagement with El Salvador and the establishment of PVARA, represents a concerted effort to explore new economic avenues. This strategy is being pursued while carefully navigating its complex fiscal landscape and substantial international financial obligations, balancing innovation with fiscal prudence.