Angola wants to ban BTC block reward mining, citing the high energy consumption at a time when more governments are scrutinizing the sector.
In July, Angola’s Cabinet signed off on a draft bill that bans BTC mining. The bill is now before the country’s parliament, and if it sails through, President João Lourenço will sign it into law.
The bill mainly aims to protect Angola’s national grid, the country’s Finance Minister Vera Sousa says. Despite being the second largest oil producer in Sub-Saharan Africa, the country gets 70% of its electricity from renewable sources.
“Cryptocurrency mining activities are prohibited in the national territory, and illegal possession of cryptocurrency material, cryptocurrency mining, improper use of electrical installation licenses, and interference in the national electrical system are criminalized,” she stated.
Angola is one of many countries concerned about BTC’s energy consumption. China, which once accounted for over 70% of the BTC hash rate, has been booting out miners for years now. The U.S. and Kazakhstan were two of the top destinations for these miners, but even these BTC mining-friendly destinations are changing their stances.
In the U.S., lawmakers like Senator Elizabeth Warren (D-MA) are cracking down on the sector and pushing for more stringent laws to regulate the industry. Kazakhstan, on the other hand, has been cutting off some of the miners from the national grid.
For Angola, BTC’s power-hungry mining is not the only concern. According to the minister, it’s the first step toward restricting the use of digital currencies. Angola wants to preserve the central bank’s role as the only entity that can issue currency, she added.
Other concerns include using digital assets for money laundering and terrorist financing.
Regulate, don’t ban
Local industry stakeholders have criticized the ban, calling on the government to regulate the industry.
“If this law is approved, it will be a significant setback for the adoption of cryptocurrencies in Angola,” stated Manuel Euclides, founder of local digital asset exchange Yetubit.
“In my opinion, the government stands to gain much more by regulating and working with strategic companies that understand the local market… the government will also lose out on tax revenue from Angolan individuals who invest in cryptocurrencies and cryptocurrency mining companies that would pay for energy consumption.”
Angola has become one of Africa’s biggest BTC mining hubs. A report by Cambridge University placed the country only behind Egypt and Libya in BTC hash rate production in Africa.
Angola is also one of the cheapest countries to mine BTC in Africa, costing $7,300 on average to mine one BTC, data shows. Only Algeria, Sudan, and Ethiopia rank higher.
However, according to Euclides, most of the mining is conducted by foreigners, mostly from China, Vietnam, and Israel.
“They mine in Angola due to our cheap energy in comparison to other regions of the world,” he says.
Some of the mining farms operate illegally, and the government has shut down dozens in recent months. Last month, the country’s top investigative agency busted an undercover mining operation set up inside a brick factory, arresting dozens of Chinese nationals.
Angola is becoming a digital asset hub and has leapfrogged many of the traditional big players. A July report showed that the country’s digital asset sector is as vibrant as Kenya’s and South Africa’s.
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