- Crypto miners in Laos have been barred from utilizing power due to heightened demand caused by a heatwave, affecting non-renewable mining
- Since 2021, Laos has gradually embraced crypto, granting approvals for mining and endorsing regulated platforms
- A crypto mining initiative launched in Laos in 2022 has aimed at significant tax revenue, but unsettled debts jeopardize miners’ prospects
Cryptocurrency miners in Laos have been banned from using electricity from the country’s grid due to a surge in demand. An unprecedented heatwave has led to Electricite du Laos (EDL) declaring that it needs to funnel resources to citizens, and so has banned mining farms from drawing from it. However, given that 95% of Laos’ crypto mining is done using hydropower, this shouldn’t affect the industry too much.
Laos’ Crypto Embrace Started in 2021
Laos has been gradually accepting crypto since 2021 when the Laotian government granted approval to six companies to engage in cryptocurrency mining and trading. Three months later, the Bank of Laos sanctioned two cryptocurrency trading platforms, namely Lao Digital Assets Exchange (LDX) and Bitqik. These platforms stood out as the sole regulated entities in the country providing comprehensive cryptocurrency services.
Crypto mining first took hold in May 2022 when the country introduced a specialized cryptocurrency mining initiative in the Champasack Province, a development orchestrated by Lao Crypto Mining in collaboration with AIF Group. As of August 2022, estimates indicate that Laos could generate nearly $190 million in tax revenue from cryptocurrency-related activities by the conclusion of the year.
Crypto Firms Not Paying Their Way
All has not gone to plan, however; the mining companies aren’t meeting the outstanding debts they owe, which could see them fail to reopen. The unexpected meteorological situation that has led EDL to cut power to the remaining 5% of non-renewable miners could see many shuttered completely, starved of income to pay their debts.
Many crypto mining companies in the US and other countries have agreements in place where they will dial back requirements at times of stress on the grid, such as extreme heat and cold.