Pakistan’s Crypto Leap: Bitcoin Reserve to Fuel DeFi Innovation

Introduction

Pakistan is making waves in the global cryptocurrency arena, with its crypto chief, Bilal Bin Saqib, announcing a pioneering plan to deploy the nation’s Bitcoin reserve into decentralized finance (DeFi) protocols for yield generation. Revealed at the Bitcoin 2025 conference on May 28, 2025, and detailed in a July 1 interview with Cointelegraph Magazine, this strategy marks a dramatic shift from Pakistan’s prior anti-crypto stance. With 2,000 megawatts of surplus energy allocated for Bitcoin mining and a regulatory framework taking shape, Pakistan aims to redefine its economic future through blockchain innovation.

Strategic Bitcoin Reserve Unveiled

At Bitcoin 2025 in Las Vegas, Bilal Bin Saqib, Pakistan’s Special Assistant to the Prime Minister on Crypto and Blockchain, declared the establishment of a government-led Strategic Bitcoin Reserve, inspired by the U.S.’s similar initiative. The reserve will utilize Bitcoin seized from criminal activities, previously idle with law enforcement, to bolster national assets. Saqib emphasized a long-term hold strategy, stating, “This wallet is not for speculation or hype. We will never sell them.” Unlike the U.S.’s 200,000 BTC reserve, Pakistan’s holdings remain undisclosed, but Saqib’s vision includes generating yield through DeFi protocols, setting it apart from passive storage models.

DeFi Yield: A New Economic Frontier

Pakistan plans to leverage DeFi to grow its Bitcoin holdings, a novel approach for a sovereign nation. Saqib, influenced by a discussion with Strategy’s Michael Saylor, aims to channel reserve BTC into yield-generating protocols, potentially mirroring Strategy’s 19.2% year-to-date Bitcoin yield in 2025. This strategy aligns with Pakistan’s broader digital push, including the allocation of 2,000 megawatts of surplus energy for Bitcoin mining and AI data centers, announced in May 2025. The move has sparked optimism on X, with users like @realyanxin predicting massive user onboarding, though specifics on DeFi platforms remain undisclosed.

High-Profile Partnerships and Global Ambitions

Saqib’s U.S. tour in June 2025 strengthened Pakistan’s crypto agenda. Meetings with Michael Saylor, who joined as an advisor, and Robert “Bo” Hines, head of Trump’s Council on Digital Assets, focused on Bitcoin reserves and regulatory frameworks. Saqib also engaged with Cantor Fitzgerald’s Brandon Lutnick and NYC Mayor Eric Adams, exploring tokenization and mining partnerships. A deal with Trump-backed World Liberty Financial (WLF) in April 2025 aims to tokenize real-world assets and bolster DeFi infrastructure. These collaborations signal Pakistan’s intent to lead the Global South in digital finance, though critics like Navroop Singh question U.S. influence, alleging a “Trump-led crypto empire.”

Regulatory Challenges and Market Context

Despite enthusiasm, Pakistan’s crypto pivot faces hurdles. The Pakistan Digital Assets Authority (PDAA), endorsed in May 2025, is developing FATF-compliant regulations, but the government and central bank reiterated in June that crypto isn’t legal tender, creating mixed signals. MNA Sharmila Faruqi criticized the lack of a comprehensive legal framework, noting Pakistan’s recent exit from the FATF grey list. The IMF has also raised concerns about the 2,000 MW mining plan amid energy shortages. Bitcoin’s price at $101,492 and a $3.35 trillion market cap provide a bullish backdrop, but volatility risks could challenge DeFi yield strategies.

Conclusion: Pakistan’s High-Stakes Crypto Gamble

Pakistan’s Strategic Bitcoin Reserve and DeFi yield plan, championed by Bilal Bin Saqib, position the nation as a bold player in the global crypto race. By leveraging seized Bitcoin, surplus energy, and high-profile partnerships, Pakistan aims to transform its economy and empower its 40 million crypto wallet holders. Yet, regulatory inconsistencies, energy concerns, and geopolitical scrutiny pose significant risks. As Pakistan builds bridges with U.S. innovators and navigates a complex regulatory landscape, its crypto ambitions could either redefine emerging markets or stumble under the weight of execution challenges, shaping a critical chapter in Web3 adoption.