Laos is planning to become the new haven for the cryptocurrency miners of the world. Canada, Kazakhstan, and Russia are also strengthening their bases to engage in crypto-asset mining.
The United States has concentrated more than a third of Bitcoin mining after China vetoed the activity. However, another Asian nation decided to compete for the dominance of the hash rate. The government of Laos, a country between Thailand and Vietnam, recently authorized the trading and mining of cryptocurrencies on its territory.
Laos hopes to replenish state coffers through the mining of Bitcoin to fund priority programs. They believe that that activity will bring them a profit of around USD 190 million in 2022, said Finance Minister Bounchom Ubonpaseuth.
They plan to use mining Bitcoin and other cryptocurrencies as a source of income to help them increase resources by 20%. In other words, they are looking for their funds to reach approximately USD 2.8 billion in 2022, according to local media.
The Asian country will use those additional resources to cover the living expenses of officials and the personnel of the security forces. In addition, they will address the magnitude of healthcare expenditure to contain the COVID-19 pandemic.
In September, the Lao government authorized six companies to mine and trade Bitcoin and other cryptocurrencies on its territory. Since then, several banks and regional finance and technology regulators have drafted legislation on mining and trading crypto assets.
Laos Could Take the Dominance of Bitcoin Mining from the United States
After China cracked down on cryptocurrency mining and trading, Laos saw an opportunity to earn income from such activity.
Laos has abundant hydroelectric power from the Mekong River and is the only place in Southeast Asia that allows cryptocurrency mining. It is only a matter of time to see whether that small nation will become the new haven for miners.
Laos wants to compete with the United States to become the country that concentrates the highest Bitcoin mining power. However, it may take some time to find out what will happen, as the Southeast Asian country is just taking its first steps.
Cryptocurrency mining is now legal in Texas, South Dakota, Nebraska, North Carolina, Ohio, Pennsylvania, and other states in the United States. Also, other countries want to compete for the hash rate since Chinese miners have gone to Canada, Kazakhstan, and Russia, among other places with favorable conditions.
Only six companies will start operating in Laos, which involves building and operating facilities to install hundreds of cryptocurrency mining machines.
The country would have to summon foreign experts to build, operate, repair, clean and test the mining centers. Those facilities would be inside large warehouses linked to hydroelectric plants.
The cooling process of mining equipment, which generates heat, is complicated because the climate of Laos is usually hot. However, the cost of electrical energy is low, and only time will determine the evolution of cryptocurrency mining in that country.
By Alexander Salazar
