Good news for cryptocurrency advocates and enthusiasts as Laos, a Southeast Asian country, authorizes the trading and mining of cryptocurrency in the country. The decision to make cryptocurrency mining and trading legal in the country comes after warnings given to banks, other financial institutions, companies, and citizens, ordering them to desist from using, accepting, and trading with cryptocurrencies.
China shut its doors to miners after banning cryptocurrency mining operations, and trading activities in the country. The decision to open its doors to mining operations means quite a lot for the crypto-verse. This means that miners can decide to set up operations in the country and this makes sense because Laos is known for producing surplus hydroelectric power. While the decision will help generate revenue for the country especially from Chinese miners who have been looking out for new places to set up operations, the decision will help the cryptocurrency mining process be green and eco-friendly.
Recall that Tesla stopped accepting flagship cryptocurrency Bitcoin as a means of payment out of environmental sustainability concerns and promised to start accepting the coin as soon as there is a more stable way to mine the coin. Although Tesla’s boss Elon Musk has had talks with northern miners on how mining operations can be achieved in more friendly ways, Laos decision could help companies such as Tesla that have stopped associating with cryptocurrencies to review their decisions and bring cryptocurrencies on board again.
This week, the office of Laos’ Prime Minister said that six companies including construction companies and a bank have been given the authorization to start mining and trading cryptocurrencies such as Bitcoin, Ethereum, etc. As reported by Laotian Times, various government ministries will work with the country’s apex bank – the Bank of Laos, and the national power utility company to regulate the cryptocurrency industry.
Laos decision to approve mining and trading operations, according to experts, will help the country fill up the revenue shortages it suffered from tourism as a result of the coronavirus pandemic. There are, however, skeptics that believe that the government might be promoting cryptocurrency, while others see it as a way to create a new source of revenue that will help in cutting down the country’s debt.
Speaking about the development, David Tuck, a partner with Lyriant Advisory said that “however you cut it, Laos has an abundance of power generation capacity and it doesn’t have much internal demand for that power and one of the key requirements for crypto mining is a massive amount of power”.
Showing skepticism about the development, Zachary Abuza who is a professor at the National War College in Washington specializing in southeast Asia said that “you should be always concerned when countries with poor regulatory records start to get involved in things like cryptocurrency. To say that the Laotian financial system is immature would be a brutal understatement, and we have to be concerned if they are rushing into it”.
His comments remind us of the criticisms that El Salvador received when it adopted Bitcoin as a legal tender. However we see it, Laos stands to gain more than lose with its decision of authorizing mining and trading operations in the country. It is home to green energy and the revenue could go a long way in reducing its debt pile. This may, therefore, be its best decision as a country yet.