Laos authorities have approved mining and trading of Bitcoin, Ethereum and Litecoin by six companies. The move comes a month after warnings from the central bank about risks associated with cryptocurrencies, according to the Laotian Times.
The new activity has been approved for Wap Data Technology Laos, Phongsubthavy Road & Bridge Construction Co., Sisaket Construction Company Limited, Boupha Road-Bridge Design Survey Co., Ltd., Joint Development Bank and Phousy Group.
The Ministries of Technology and Communications, Finance, and Energy, and a number of other agencies, in coordination with the Bank of Laos and the state electricity company will conduct consultations on regulating the use of cryptocurrencies in the country. A joint report will be presented to the prime minister on 16–17 September.
Analysts surveyed by the Financial Times described the Lao authorities’ decision as logical given the excess hydropower generation and crackdown on miners in China.
Some warned that the new activity could attract criminal organisations. The north-west of the country lies in the so-called золотой треугольник, known as the region for the production and trafficking of drugs.
Legalisation of cryptocurrencies may be explained by a drop in tourism revenues amid the COVID-19 pandemic. The fall in tourist traffic could also have reduced electricity demand, while the government spent substantial funds on building dams on the Mekong River and its tributaries.
“Using hydroelectric power in mining will allow Laos to position the industry as carbon-neutral,” said David Tak, partner at Lyriant Advisory.
The Lao government recently pledged to intensify efforts to combat money laundering. It was previously criticised by the FATF and the United Nations Office on Drugs and Crime, the publication noted.
The IMF has warned of risks in El Salvador’s bitcoin payments, and the World Bank has declined to assist the country with the implementation of cryptocurrency.
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