Laos Hopes to Get Out of Debt with Cryptomining
Date: 2025-09-22 Author: Henry Casey Categories: IN WORLD
Faced with a serious debt crisis due to the large-scale construction of hydroelectric dams, Laos intends to use cryptomining as a way out of this difficult situation. According to the government, the excess electricity generated by energy projects can be converted into income through mining the first cryptocurrency.
The initiative has provoked mixed reactions. International investors are showing interest, seeing it as a way to integrate the country into the digital economy, but local activists and environmental organizations are sharply criticizing the project. They point out that the dams have already caused environmental damage: they have disrupted river ecosystems, reduced agricultural productivity, and undermined fisheries. Furthermore, thousands of residents have been forced to flee their homes.
Experts note that the government's move is driven not so much by domestic needs as by debt pressure. "Laos is unable to service its loans and is seeking ways to monetize the excess energy produced domestically," said Vitoon Permpongsakaroen, director of the Mekong Energy and Ecology Network.
However, even hydropower doesn't guarantee stability. During dry seasons, the country is forced to purchase electricity from neighboring Thailand, and the state-owned company Electricite du Laos already restricted power supplies to cryptocurrency farms last year due to resource shortages and debt obligations.
At the same time, the government continues its commitment to digitalization. In 2023, it presented an economic and social development strategy focused on blockchain technologies, artificial intelligence, and e-finance. Licensing of mining and trading companies, including oversight of illegal Chinese miners, is part of this policy. It is planned that by 2030, Laos will be able to transition to a fully digital economic model.
Nevertheless, financial risks remain significant. The International Monetary Fund warned back in 2024 of critical public debt levels and the associated threats to growth. Amid the debt burden, inflation is accelerating, and the national currency, the kip, has lost half its value against the US dollar over the past five years.
External factors are compounding the difficulties. New 40% US trade tariffs have dealt a serious blow to the country's exports. These measures, imposed by President Donald Trump, have made Laos's terms of trade among the most unfavorable in the region.
Thus, relying on crypto mining could help Laos partially offset its economic difficulties, but it comes with significant risks, both internal and external.
