Venezuela Bans Cryptocurrency Mining to Protect Electricity Grid
Date: 2024-05-20 Author: Gabriel Deangelo Categories: IN WORLD
Venezuela has officially banned cryptocurrency mining as part of measures to stabilize the national energy supply. The country's energy ministry has proposed disconnecting mining farms from the national power grid, citing the need to improve the efficiency and reliability of the electricity supply.
Strategic measures to stabilize electricity supply
Officials emphasize that this step is aimed at eliminating the load on the power grid caused by the activity of mining farms. The Energy Department says the measures will help stabilize the nation's energy supply, which has been plagued by unreliability for the past ten years. According to the ministry, stabilizing the power grid is a priority given the country's current needs.
Verified by the National Cryptocurrency Association
The National Cryptocurrency Association of Venezuela has confirmed information about the ban on mining Bitcoin and other digital assets throughout the country. The ban is part of a major government campaign to combat corruption. As part of this initiative, law enforcement seized approximately 2,000 mining devices in the northern region of Venezuela.
History of the Energy Crisis
The energy crisis in Venezuela began in 2009 and has only gotten worse since then. In 2019, the situation worsened to such an extent that some cities were left without electricity for several days. The introduction of a ban on cryptocurrency mining is seen as a necessary measure to reduce the load on the energy system and prevent further power outages.
Previous measures against cryptocurrency mining
This is not the first time the Venezuelan government has spoken out against cryptocurrency mining. In November 2021, law enforcement seized more than 100 pieces of mining equipment in Paolo Verde. In March 2023, authorities stopped the activities of large Bitcoin miners in several regions of the country. These actions demonstrate the government's consistent policy to regulate the cryptocurrency industry.
Corruption schemes and the use of cryptocurrencies
Venezuela also faces corruption schemes related to mining and the use of cryptocurrencies. Venezuelan Attorney General Tarek William Saab said government officials carried out illegal oil transactions with the assistance of the National Cryptocurrency Department. In April 2024, Reuters reported that Venezuela's state oil company (PDVSA) was using the USDT stablecoin to circumvent sanctions, leading to Tether's issuer promising to freeze sanctioned addresses.
The ban on cryptocurrency mining in Venezuela is part of a comprehensive approach to stabilizing electricity supplies and fighting corruption. These measures underscore the Venezuelan government's determination to control energy use and regulate the cryptocurrency industry amid a protracted energy crisis.
