Pakistan announces the establishment of a Bitcoin strategic reserve, why are small countries betting on BTC?

In addition to companies buying bitcoin, more sovereigns have begun to implement the bitcoin strategic reserve plan, which Pakistan announced at this week's bitcoin conference. This article is from Luke, written by Marsbit, and compiled by PANews. (Synopsis: Pakistan announces 2,000 megawatts of electricity for "Bitcoin Mining and AI Center" Prime Minister appoints Special Assistant for Blockchain and Cryptocurrencies) (Background added: Pakistan wants to sell excess electricity: targeting Bitcoin mining and AI data centers) With Bitcoin, small countries are trying to find their place in the global financial system. On the stage of global finance, Bitcoin is no longer just a "toy" for investors, but is gradually becoming part of the national strategy. In May 2025, a table titled "Countries Holding Bitcoin" circulated on the web, revealing the holdings of bitcoin by countries around the world: the United States topped the list with 207,189, worth nearly $2.2 billion; China followed with 194,000; Smaller countries such as Bhutan and El Salvador are among them, with 13,029 and 6,089, respectively. A total of 529,705 bitcoins worldwide are held by governments, accounting for 2.522% of the total number of bitcoins. However, one name missing from the table has recently sparked a buzz – Pakistan. The South Asian country announced the creation of a national strategic reserve of bitcoin and promised to "never sell". This move not only puts Pakistan on the cusp of cryptocurrency, but also makes people wonder: why are more and more small countries so keen to embrace Bitcoin? Pakistan's Bitcoin Ambitions: From Energy to National Reserves Pakistan's Bitcoin strategy kicks off amid a hustle and bustle. In May 2025, at the Bitcoin 2025 conference in Las Vegas, USA, Bilal Bin Saqib, Special Assistant to the Government of Pakistan and Advisor on Blockchain and Cryptocurrency Affairs, announced that Pakistan will establish a national Bitcoin strategic reserve and follow the example of the United States to hold these assets for a long time. The inspiration for this plan is clear: the 207,189 bitcoins held by the US government, worth about $2.196 billion, or 0.987% of the total number of bitcoins, have become a "benchmark" in the eyes of many countries. While the exact size of Pakistan's holdings has not been disclosed, its ambitions are clear. Pakistan's Bitcoin strategy doesn't stop at reserves. The government also announced that it would allocate 2,000 megawatts of surplus electricity to Bitcoin mining and AI data centers. The move goes straight to the country's energy pain point: coal-fired power projects such as Sahiwal and Port Qasim are currently being executed at just 15% capacity, resulting in a lot of wasted electricity. Through mining, Pakistan hopes to convert these "idle energy" into economic value. Based on the current Bitcoin price (about $106,000 per coin), every bitcoin mined can bring considerable income to the country. What's more, the scheme has also attracted the attention of foreign investors, and the government has attracted several delegations of mining companies through tax breaks. Read more: Pakistan announces 2,000 megawatts of electricity for 'Bitcoin Mining and AI Center' Prime Minister appoints Special Assistant for Blockchain and Cryptocurrencies At the same time, Pakistan's digital asset management framework is accelerating. On May 22, 2025, the Digital Asset Management Authority of Pakistan (PDAA) was officially established to oversee cryptocurrency trading, DeFi applications, and asset tokenization, and promote the application of blockchain technology in government, land records, and finance. PDAA was proposed by the Pakistan Cryptocurrency Commission, whose advisers included former Binance CEO Changpeng Zhao, bringing international experience to policymaking. PDAA is also tasked with promoting the tokenization of treasury bonds and supporting Web3 start-ups in an attempt to establish Pakistan as a crypto hub in South Asia. Pakistan's crypto user base is equally impressive. The country is expected to have more than 27 million crypto users by 2025, representing more than 10% of the total population (247 million). This figure not only reflects the enthusiasm of the young population for digital assets, but also provides public support for the government to promote the crypto economy. From energy to policy to user base, Pakistan's Bitcoin strategy is advancing in multiple dimensions. Bitcoin boom in small countries: from Bhutan to El Salvador Pakistan is not alone. Looking at the world, the exploration of bitcoin by small countries has long been in full swing. Bhutan, a small country at the foot of the Himalayas, has become a "hidden player" in Bitcoin mining with abundant hydropower resources. According to the latest data, Bhutan holds 13,029 bitcoins, worth about $138 million, or 0.062% of the total. These bitcoins are accumulated by state-owned enterprise Druk Holdings through mining, and the low cost of water and electricity gives Bhutan an advantage in the mining competition. El Salvador is at the vanguard of a small country's Bitcoin strategy. In 2021, the Central American country became the first in the world to make Bitcoin legal tender and continues to increase its reserves. As of May 2025, El Salvador held 6,089 Bitcoin, worth approximately $64.53 million, or 0.029% of the total. The unrealized profit on its Bitcoin reserves has reached $357 million, showing the return of the price increase. However, El Salvador's path to Bitcoin has not been easy. The International Monetary Fund (IMF) reached a $1.4 billion loan agreement in December 2024, but called for keeping the size of existing reserves unchanged and amending the Bitcoin Act to remove mandatory acceptance of bitcoin by the private sector. The IMF's cautious approach reflects the other side of Bitcoin: it is both an opportunity and a potential financial risk. Bitcoin holdings in Ukraine bear the mark of war. During the Russian-Ukrainian conflict, Ukraine raised more than $100 million through cryptocurrency donations, becoming a significant source of its 46,351 bitcoins (worth about $491 million). Ukraine's relatively open crypto policy has attracted a large number of Web3 start-ups, and its Bitcoin holdings account for 0.221% of the total, ranking among the best among small countries. By comparison, Georgia's 66 bitcoins (worth about $6.99 million) pale in comparison and may be a symbolic holding of early confiscated assets that have yet to form a clear national strategy. Why are small countries keen on Bitcoin? The Interweaving of Economy and Geography Behind the embrace of Bitcoin by small countries is the interweaving of economic, geopolitical and technological factors. First, Bitcoin is seen as a hedge against economic distress. Many small countries face pressure from insufficient foreign exchange reserves, inflation or high levels of debt. El Salvador, for example, has a public debt of more than 90% of GDP, and Pakistan also bears a heavy debt burden. The volatility of traditional financial markets — such as falling stocks and low interest rates on bonds — has led these countries to turn to Bitcoin as an alternative asset. Its decentralized nature exempts it from the monetary policy of a single country, especially in a dollar-dominated financial system, Bitcoin offers small countries the possibility of enhancing their economic autonomy. Second, energy utilization is a direct driver of a small country's Bitcoin strategy. Hydropower mining in Bhutan mirrors Pakistan's 2,000 MW electricity distribution plan. Many small countries have underutilized renewable energy or excess electricity, and Bitcoin mining not only monetizes these resources, but also attracts international miners and technology companies. Bakis...