Laos, a country in Southeast Asia, has officially approved cryptocurrency mining and trading, as part of a policy change to take advantage of the crackdown on crypto mining. currency in China – and to make profits for the indebted nation.
Analysts are banking on the “cautious” decision to skyrocket the economy of the communist-led country of 7 million, which produces vast surpluses of hydroelectric power.
However, some experts warn that criminal gangs will threaten the move. And seek the benefits of the new trade thereby affecting its kickoff.
The cryptocurrency push comes after the country’s central banks warned individuals and businesses against the use (and possible adoption) of cryptocurrency.
Cryptography to save the country’s economy
The Prime Minister of Laos has given the green light for six companies, including banks and construction companies, to start mining and trading Bitcoin, Ethereum and Litecoin.
To regulate the highly volatile cryptocurrency industry, government ministries will now work in conjunction with the Bank of Laos and Electricité du Laos (the national electricity company). The government will consult and study further on this at the meeting next month.
The crypto movement is meant to protect the debt-ridden country from the Covid-19 crisis, which has dramatically reduced demand for hydropower – a cornerstone of the Laotian economy. The country is struggling with debts borrowed to finance the construction of dams.
Although Laos produces vast excess hydropower, the county has little internal demand for this rich resource. This explains the country’s latest approval for mining and trading cryptocurrencies, which requires massive amounts of energy.
Hydroelectric cryptocurrency mining is a “carbon neutral” industry
Laos may be the only country to use hydropower to mine cryptocurrencies. As such, he plans to present a case for calling the industry “carbon neutral”. This comes at a time when the carbon footprints of cryptocurrencies are the subject of major international criticism.
The mountainous topography and the great distances of the seaports have, over the years, held back the growth of the economy of Laos. Encourage the government to use hydroelectric power to power casinos and a range of other industries.
For example, Laos is preparing to unveil a hydroelectric railway line in December that will link Kunming to China, then to Vientiane.
Thus, crypto mining and trading will become a source of revenue for the government. And probably even help offset his heavy $ 14 billion debt.
Laos has recently come under intense scrutiny by the Financial Action Task Force, the United Nations office and the United States over drugs and crime. But he pledged to intensify his efforts to fight against vices.
Experts also warn against the early adoption of crypto by the young Laotian financial system. They claim the country has poor regulatory systems to rush into digital currencies.