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Pakistan is aspiring to achieve technological autonomy. These ambitions are however faced with significant political and economic challenges.
ICD examined how the Islamic Republic, with its great potential for human development, is trying build a future digitally amidst instabilities.
The Digital Economy: First Steps
Pakistan is a nation with over 255 millions people. It embraces digital technology. Recently, there’s been an increasing interest in artificial intelligence and cryptocurrencies. In big cities such as Karachi and Lahore young people are using more blockchain apps and trading cryptocurrencies.
For many people, digital assets are a means to safeguard themselves against financial instabilities. Digital assets can be a great way to preserve and grow capital in the face of high rupee inflation. Cryptocurrencies have become popular among the younger, more technologically-literate population as a way to earn money and transfer funds across borders.
Not all Pakistanis have access to high-speed Internet. According to 2025 projections, 45.7% have a reliable connection. Rural areas often remain unconnected. The mass adoption rate of digital currency is slowed down by this.
Cryptocurrency Paradox
In Pakistan, the situation of cryptocurrencies is an example of the tension between government and population. Digital assets currently exist in a grey area. Pakistani authorities planned to ban cryptocurrencies in 2022 and block websites related to digital assets. The State Bank also announced that it would launch a central-bank digital currency by 2025.
The country still has the highest rate of adoption of digital assets. According to Chainalysis, Pakistan’s retail investors will be among the ten top global adopters of digital assets in 2024.
Analysts also predict a rapid increase in growth. By 2025, the industry is expected to generate $1.6 billion and the number of crypto-users will exceed 27,000,000.
Dreams about Bitcoin Mining and State Reserves
Khyber Pakhtunkhwa announced in 2021 plans to create state-owned farms for mining digital gold. It was hoped that cheap hydropower would be used to refill the government’s treasury.
Bilal Bin Saqib announced in 2025 that he would divert excess electricity for bitcoin mining, and data centers to support the artificial intelligence industry. Local media revealed that 2 GW of electricity will be allocated by the Pakistani Government for this purpose.
Focus is placed on using surplus renewable resources, such as hydro, wind and solar power. It is a good example of an environmental agenda that is balanced without Luddism. The country does not fear technology, but tries to minimise harm done to the environment.
Saqib soon announced that a digital gold reserve would be created. The International Monetary Fund was concerned by these intentions as well as other country moves in cryptocurrencies and AI.
Pakistan announced plans for a Bitcoin fund and to use surplus renewable energy in mining. The practical implementation of such initiatives will require a legal framework. Currently, a clear legal framework is not in place, and this is the biggest obstacle to achieving the desired goal.
Digital Silk Road
China is the main partner of Pakistan. Beijing is Islamabad’s principal partner and their cooperation extends far beyond politics. The megaproject China-Pakistan Economic Corridor, or CPEC, is a part of this cooperation.
Support areas:
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Infrastructural: Chinese firms are active in the laying of fiber optic cables. The PEACE project (Pakistan and East Africa Connecting Europe), for example, reduces Pakistan’s dependency on existing communications lines by connecting it directly to partner nations.
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Surveillance and artificial intelligence: China helps to implement Safe City Systems in Islamabad and Lahore. They are large platforms that have thousands of cameras, and AI algorithms to analyze facial expressions and behavior.
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5G Connectivity: Chinese companies Huawei and ZTE have been the primary contractors for testing and installing fifth-generation networks across Pakistan.
A stable and technologically-advanced Pakistan would be a good security measure for China’s CPEC investments and a major node of the “One Belt, One Road Initiative”.
Internet Under Control
Pakistan’s World Wide Web is heavily regulated. However, the method used to regulate it differs from China. Pakistan uses a crude, reactive approach to content filtering, while “The Great Firewall of China”, a proactive, sophisticated system of filtering, is used in China.
Pakistan Telecommunication Authority is the main regulator. The PTA’s tools include:
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Blocking platforms: The authorities haven’t hesitated in blocking access to YouTube TikTok Wikipedia and Social Network X on a national scale. These are temporary and spotty blockades.
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Shutdowns : The government shuts mobile internet down in certain regions or across the entire country during political unrest or protests. It is believed that this measure can be used to prevent protestors from coordinating.
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Throttling (slowing traffic): Limiting access to resources in order to reduce their speed.
These techniques are harmful to the digital economy but they’re justified by authorities who believe that it is necessary to keep control.
India’s Water Leverage
Access to water is Pakistan’s biggest vulnerability. It is critical that rivers originate in Indian territory, or Indian-controlled Kashmir. New Delhi is using the legacy of British India’s partition as a powerful lever.
According to the Indus Waters treaty, which was signed in 1960, this relationship is defined by its terms. In accordance with the treaty, Pakistan gets the “western” flow (Indus River, Jhelam and Chenab), while India gets the “eastern flow” (Ravi Beas Sutlej). India, however, has the right of building hydropower plants along “Pakistani rivers”.
This vulnerability was once more highlighted by a second escalation in the Kashmir conflict, which began on April 20, 2025. India responded to this escalation by restricting the flow of water through the Chenab River and Jhelam River, which are used for power and agriculture in Pakistan. India can exert economic pressure directly on its neighboring countries by taking such actions.
Technology development is a necessity in this environment. Artificial intelligence has already been used in agricultural irrigation to maximize water usage. The shift towards alternative energy, such as hydroelectric mining is also reducing India’s critical dependency on its rivers.
The Key to the Future is Economic Realism
It’s important to look at the economic indicators in Pakistan. In comparison to other countries, the average annual income is only $1 824. It is impossible to buy mining equipment, for instance, for most Pakistanis.
The figure is the reason why China is heavily dependent on Chinese technology and loans. It also explains why people are turning to cryptocurrency out of sheer poverty. The idea of creating sophisticated AI eco-systems, or purchasing bitcoins for the government reserve seems to be disconnected from reality. Basic needs are not met for many people.
Pakistan stands at a critical crossroads. One hand there are huge amounts of human capital and interest in digital financial services, as well as support from China. The other side is a chaotic regulatory system, poverty and constant conflict with India.
It will be up to the country to strike a balance between its ambitions and realities. The country could be an inspiration to other developing nations if plans for bitcoin mining and a reserve come true. These projects could remain on paper if they don’t address the fundamental issues, such as internet accessibility and energy stability.
The risks are many, ranging from economic isolation if the path fails to digital authoritarianism. This technological leap, however, could offer the chance of a brighter future for this country.
