Laos allows the trading and mining of cryptocurrencies | Sept 16
Laos allows the trading and mining of cryptocurrencies
Laos has allowed cryptocurrency trading and mining, marking a change in policy to help the Southeast Asian country benefit from crackdown on cryptocurrency mining in China.
Analysts say this move is a logical step for a country with an electricity surplus (from hydropower) like Laos. However, some experts point out that some criminal groups can benefit from trading cryptocurrencies.
The move to enter the virtual currency market marks a 180 degree change for Laos as the Bank of Laos warned banks, businesses and people against using cryptocurrencies last month.
The Lao Prime Minister’s office announced this week that six companies, including construction companies and a bank, have received permission to mine and trade cryptocurrencies such as Bitcoin, Ethereum and Litecoin.
The ministries will work with the Central Bank of Laos (BoL) and Electricité du Laos, the national electricity company, to oversee the digital cryptocurrencies industry, according to The Laotian Times. Authorities will meet this month to discuss the digital currency issue.
“The reality is that Laos has excess electricity generation capacity and does not have much domestic demand for electricity,” said David Tuck, partner at Lyriant Advisory. “And one of the main requirements for mining is to have huge amounts of electricity.”
Laos’ mountainous terrain and remoteness from seaports has long stunted Laos development, forcing officials to work hard to support industries from hydropower to casinos. A railway line from Kunming (China) to Vientiane is scheduled to go into operation in December 2021. The Laotian government has been talking about promoting cryptocurrency mining projects as a source of income as Laos tries to pay off its nearly 14 year debt. Billion USD.
However, northwest Laos is part of the Golden Triangle, a border area with Myanmar and Thailand notorious for drug production and trafficking that has increased dramatically during the pandemic.
The Laotian government recently announced an intensification of its anti-money laundering efforts as it is under the supervision of the Financial Action Task Force, the US and the United Nations Office on Drugs and Crime.
“You should be careful when countries with a history of poor regulation start getting involved in things like cryptocurrencies,” said Zachary Abuza, an expert on Southeast Asia.
Vu Hao (according to the Financial Times)