- Landlocked Laos is looking to start cryptocurrency mining within its territory to take advantage of its abundant hydropower
- Heavily-indebted Laos is looking for new sources of revenue and embrace of cryptocurrency mining and trading comes just a month after the central bank issued warnings about the sector
Known as the land of a thousand waterfalls, the impoverished and landlocked Southeast Asian country of Laos has no lack of hydroelectricity, but a shortage of hard currency.
One of the country’s hardest hit by the coronavirus pandemic, the Lao government is heavily indebted and reversing an earlier anti-cryptocurrency stance to embrace both mining and trading activities.
Coming just a month after the Lao central bank issued a warning against cryptocurrencies, Laos is now permitting not just mining activities but trading as well.
The communist-ruled country of 7 million produces an abundance of hydroelectric power, which it typically sells to neighboring industrial powerhouses Thailand and Vietnam.
According to the Lao office of the Prime Minister, six companies, including construction groups and a bank, have been authorized to begin mining and trading cryptocurrencies.
A report in the English language, The Laotian Times, has said that government ministries will now work with the Bank of Laos and Electricité du Laos, the national power utility, to regulate the industry, with the findings of the research and consultation set to be discussed at a government meeting this month.
The move into cryptocurrency mining comes as powerful neighbor to the north China has cracked down hard on its industry, forcing miners to head offshore in search of more hospitable locations to conduct their business.
Laos has an abundance of hydropower, the cornerstone industry of a country that borrowed heavily to build dams along the mighty Mekong river and its tributaries, but is now facing plummeting demand for power as the Covid-19 crisis ravages the region.
The use of hydropower may also help Laos pitch the cryptocurrency mining business as “carbon neutral” as well, at a time when the carbon footprint of cryptocurrencies is coming under increasing scrutiny and criticism.
Elon Musk has previously said that Tesla would begin accepting Bitcoin again as soon as the majority of it is mined using sustainable energy.
The mountainous topography of Laos is breathtaking but has also long stunted its growth, as has its distance from seaports.
To sustain its economy, Laos has had to borrow heavily to fund the construction of dams to tap its abundant hydropower and moving into cryptocurrencies may be a way for Vientiane to pay down its mounting US$14 billion debt pile.