- Islamabad and San Salvador sign agreement to cooperate on Bitcoin regulation, mining and remittances.
- Joint working group to be formed within 60 days; first pilot miners expected by Q1 2026.
The governments of Pakistan and El Salvador on Thursday announced a bilateral accord that puts Bitcoin at the center of a new economic partnership. The memorandum of understanding was signed in San Salvador by finance ministers Muhammad Aurangzeb and Alejandro Zelaya after three months of technical talks. Both sides describe the document as a road map for joint research, regulatory harmonisation and investment in Bitcoin infrastructure. Officials emphasised that the accord leaves monetary sovereignty intact and does not require Pakistan to adopt Bitcoin as legal tender.
President Bukele met yesterday at Casa Presidencial with the Minister of Crypto for Pakistan @Bilalbinsaqib pic.twitter.com/J2SdnTeQCJ
— The Bitcoin Office (@bitcoinofficesv) July 16, 2025
The deal arrives as both nations search for fresh engines of growth amid tight global liquidity. Pakistan faces chronic dollar shortages, while El Salvador seeks to deepen its bet on digital assets after issuing Bitcoin backed bonds earlier this year. The agreement is expected to move quickly from paper to pilot projects because deputies have already drafted detailed annexes.
Cooperation framework
The text establishes a joint working group of central bank officials, energy planners and private sector representatives. The group will meet every quarter and publish progress reports in English and Spanish. Immediate priorities include sharing supervisory data on cryptocurrency exchanges, aligning anti money laundering rules and identifying sites in northern Pakistan with surplus hydroelectric power suitable for modular Bitcoin mining farms. El Salvador will contribute technical staff from its state owned Bitcoin Office and share operational data from its geothermal powered Chivo One mining project.
Financing for pilot projects will come from a four hundred million dollar fund backed by regional development banks, venture funds and family offices. Islamabad also plans to channel remittance flows from its overseas workforce through the Lightning Network. Officials estimate that routing even ten per cent of annual remittances through low cost Bitcoin rails could save Pakistan two hundred million dollars in fees each year.
Market and policy implications
Analysts note that the accord links a South Asian energy exporter with a Central American economy that has already embedded Bitcoin in public finances. While the pact is limited to exploratory work, it signals intent to diversify foreign reserves and modernise cross border payments. Pakistan was among the five largest recipients of remittances in 2024, and cost reduction is a strategic priority for the new government.
Industry participants expect the partnership to increase demand for compliant mining hardware and spur interest in renewable powered mining. The agreement may also give El Salvador wider diplomatic reach as it seeks partners beyond Latin America. Capital markets reacted calmly. The Pakistani rupee was stable in offshore trading, while El Salvador’s dollar denominated bonds held previous gains. Market attention now shifts to the first quarterly report, due in January 2026.
