Laos has approved a number of cryptocurrency mining and trading projects in the country in an effort to find another source of income to supplement the losses caused by the decline in tourism due to COVID-19-related measures. Six companies have been authorized to start cryptocurrency trading and mining in the country, according to the prime minister’s office.
Laos relies on digital currencies
Laos has approved mining and trading operations on its territory, contradicting the guidelines of its central bank, which warned about crypto just a month earlier. The move comes as the small Asian nation tries to find alternative sources of income to cope with the aftermath of the Covid-19 pandemic.
The Prime Minister’s office stated that six companies are now authorized to conduct cryptocurrency-related activities in the country. According to reports, the government will now begin regulating these activities. Laos could also try to attract some of the displaced miners from China by being a close substitute that can also offer plenty of cheap hydropower that is currently underutilized.
Green mining potential and money laundering concerns
The origin of this clean energy could also be a major attraction as people are more aware of the high energy consumption of mining. This push for green energy and renewable energy for the mining industry was initiated in part by Elon Musk, who commented that the bitcoin network’s energy usage was “insane” and bitcoin payments for cars were suspended at Tesla.
This could be life-saving for Laos as its own energy consumption is orders of magnitude lower than the country’s, making it easy to set up a mining industry without disrupting the national electricity grid.
However, regulators have concerns. Laos is in an area that is well known for the amount of drugs it produces. Many fear that the surge in these industries could lead to cryptocurrencies being used for money laundering purposes. Zachary Abuza, a professor at the National War College in Washington, told the FT news agency:
You should always be concerned when countries with poor regulatory records start embarking on things like cryptocurrencies. To say the Laotian financial system is immature would be a brutal understatement and we need to worry if they get involved.
What do you think of Laos authorizing the mining and trading of cryptocurrencies? Let us know in the comments section below.
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source https://www.bisayanews.com/2021/09/18/laos-authorizes-cryptocurrency-mining-and-trading-activities-bitcoin-news/
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