byCryptodrilling TeamAugust 28, 2023
No, Laos did not suspend its crypto mining operations.
Contrary to recent news, Laos did not suspend mining farms currently in operation. It did however announce it would temporarily stop receiving new license applicants and potentially revoked licenses from companies that hasn't started operation.

Setting the Record Straight: Laos and Cryptocurrency Mining

Recent headlines have suggested that Laos has suspended all crypto mining operations due to a heatwave and rising power demands. However, a closer look at the facts reveals a different story.

The Story Behind Laos' Decision

Contrary to the circulating news, Laos did not suspend all cryptocurrency mining operations. Instead, Électricité du Laos (EDL), the country's power authority, announced a temporary halt in receiving new license applications for crypto mining. This decision was primarily influenced by the summer's severe heat, resulting in a surge in electricity usage, compounded by drought conditions throughout the first half of 2023. At Cryptodrilling, we work closely with several licensed mining operators in Laos and we have verified that their operations remain uninterrupted.

The Bigger Picture

While the recent decision by EDL might raise eyebrows, it's crucial to view it in the broader context. Laos relies heavily on hydropower, accounting for 95% of the country's electricity generation. The drought conditions during the first six months of 2023, exacerbated by the increased power consumption due to the heatwave, is a significant concern. However, it's also worth noting that the government's decision is not a blanket ban on crypto mining but a temporary measure to address the immediate challenges.

Outlook for Laos

In September 2021, the Laotian government authorized six companies to piloting the mining and trading of cryptocurrencies like Bitcoin, Ethereum, and Litecoin Since then, the number of licensed companies has grown to more than 20. However, due to the crypto downturn and a long bear market, only half of the companies have activated their licenses. Yet, owing to the crypto market's downturn and an extended bearish phase, merely half of these firms have activated their licenses. By our calculations, out of the 1.2GW of power allocated, less than 600MW is currently employed in cryptocurrency mining. Nevertheless, the long-term prospect for cryptocurrency mining in Laos remains promising. Laos has one of the highest hydropower potential in the region and with the electrical infrastructure in need of financing, it needs to find a ready buyer of the hydropower it generates and Bitcoin miner remains a keen buyer.

Announcement from EDL (Électricité du Laos)

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