(Natural News) The southeastern European nation of Kosovo imposed a ban on cryptocurrency mining to reduce its energy consumption. The ban enacted Jan. 4 came amid the former Yugoslavian territory facing its worst power shortage in decades.
In a statement, Kosovar Economy and Energy Minister Artane Rizvanolli said: “All law enforcement agencies will stop the production of this activity in cooperation with other relevant institutions that will identify the locations where there is cryptocurrency production.” She added that the decision to ban crypto mining was done following the recommendation of Kosovo’s Technical Committee on Emergency Measures for Energy Supply.
“These actions are aimed at addressing potential unexpected or long-term lack of electricity production capacities, transmission capacities or distribution of energy in order to overcome the energy crisis without further burdening the citizens of the Republic of Kosovo,” Rizvanolli explained.
Kosovo has become a favorite spot for young crypto miners in recent years due to its relatively affordable energy prices, with one miner who owns 40 graphics processing units among them. He spoke to Reuters on condition of anonymity that he pays €170 ($192) per month for electricity. In turn, he earns a monthly profit of €2,400 ($2,713) – more than 14 times his monthly power bill.
Crypto mining has also been on the rise in northern Kosovo. The area is heavily populated by Serbs who do not recognize Kosovo’s independence and refuse to pay for the electricity they use. Serbia itself disputes the country’s legitimacy, claiming it as the Autonomous Province of Kosovo and Metohija.
Home to 1.8 million people, Kosovo currently imports more than 40 percent of the power it consumes. Winter often causes demand for energy to spike as people mainly use electricity for heating. However, Kosovar authorities introduced power cuts in December 2021 amid outages of coal-fired power plants and high import prices for energy.
Also in December 2021, the country declared a 60-day state of emergency. The declaration sought to allow the Kosovar government to allocate more money to energy imports, introduce extra power cuts and impose other tough measures to help the country tide over the energy shortage.
Kosovo’s ban follows China’s crypto crackdown
Kosovo is not the only country that has officials crack down on domestic crypto-related activities. Several other countries – with China most notable among them – fully banned them in phases last year.
The communist country first banned financial institutions from engaging in any crypto transactions in May 2021. The People’s Bank of China (PBOC) – its central bank – summoned several officials from financial entities the following month. Representatives from payment service provider Alipay and four big banks appeared before the PBOC, where they were reminded of the ban on crypto transactions. (Related: China’s central bank calls on top executives to reinforce crypto ban.)
In a Jun. 21, 2021 statement, the PBOC reiterated that crypto activities “disrupt financial order and also breed risks of criminal activities [such as] illegal cross-border asset transfers and money laundering.” The five entities summoned pledged to step up scrutiny into crypto-related activities and immediately discontinue services meant to facilitate crypto trading.
China later imposed a total ban on all crypto in September 2021, citing concerns about the environmental effects of crypto mining and its possible criminal use. Because of Beijing’s insidious crackdown, several crypto miners in the country were forced to either sell out or go abroad to continue operations. Reuters talked to some of them in June 2021. (Related: China’s Central Bank bans all cryptocurrency transactions.)
“Many miners are exiting the business to comply with government policies. Mining machines are selling like scrap metal,” Sichuan-based crypto mining farm operator Mike Huang said. Formerly the No. 2 crypto mining hub in China after Xinjiang, Sichuan’s local government issued a ban on the practice.
Huang Dezhi, another crypto mining farm operator in Sichuan, said his team is mulling a move overseas. “If the government doesn’t reverse the policy, we will have no other choice. You cannot defy central government decisions,” he explained. Yunnan-based crypto mining project operator Liu Hongfei meanwhile said: “If the government doesn’t allow it, I just have to quit. You don’t fight the Chinese Communist Party.”
On the other hand, crypto mining firm BIT Mining quickly spirited away its machines to neighboring Kazakhstan. It said that its rigs were delivered to the Central Asian country in three batches, and the company has invested in crypto mining data centers located in Texas.
“We are accelerating our overseas development for alternative high-quality mining resources,” BIT Mining CEO Xianfeng Yang said.
Watch the video below about China’s crypto ban.
BitcoinCollapse.news has more about countries like Kosovo and China banning crypto-related activities.