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Laos has authorized the mining and trading of cryptocurrencies. This is a policy change in the debt-laden Southeast Asian countries, allowing it to change from Cracking down on digital currency mining in China.
Analysts said the move was a logical step for this inland, communist-ruled country with a population of 7 million and surplus hydroelectric power, but some have warned that criminal gangs may seek to profit from the deal.
After the country’s central bank warned banks, companies and people not to use cryptocurrency last month, the crypto push marked a shift.
The Prime Minister’s Office said this week that six companies, including a construction group and a bank, have been allowed to start mining and trading cryptocurrencies such as Bitcoin, Ethereum and Litecoin.
The government will now work with the Bank of Laos and the National Power Company Lao Power Corporation to regulate the industry. Lao Times reportThe results of the research and consultation will be discussed at a government meeting later this month.
The shift to cryptocurrency comes as Laos is dealing with the loss of tourism income caused by the Covid-19 pandemic, which has also weakened the demand for hydropower, which is the cornerstone industry of the country Bulk borrowing Build dams on the Mekong River and its tributaries.
David Tuck, a partner of business intelligence consulting firm Lyriant Advisory in Bangkok, said: “No matter how you cut it, Laos has abundant power generation capacity, and there is not much internal demand for this kind of electricity.” “Crypto mining.” One of the key requirements is large amounts of electricity.”
Tucker added that at a time when the carbon footprint of cryptocurrencies is under increasing international criticism, the use of hydropower to mine cryptocurrencies may lead Laos to call the industry “carbon neutral”.
Laos’ mountainous terrain and distance from the seaport have long hindered its development, prompting officials to support everything from hydropower to casinos and A railway line From Kunming, China to Vientiane, it will open in December. Its government has stated that it will promote mining projects as a source of income as it seeks to repay the country’s nearly $14 billion in debt.
However, northwestern Laos is part of the Golden Triangle, which borders Myanmar and Thailand and is notorious for drug production and smuggling. Has soared During the epidemic.
After being reviewed by the Financial Action Task Force, the United States and the United Nations Office on Drugs and Crime, the Lao government has recently vowed to increase its efforts to combat money laundering.
Zachary Abuza, a professor at the National War College in Washington who specializes in Southeast Asia, said: “When countries with poor regulatory records start to get involved in cryptocurrency and other things, you should always worry.” “Speaking of Laos’ finances. Immaturity of the system will be a cruel understatement, and we have to worry about whether they will act hastily.”
2018 U.S. Treasury Department Impose sanctions What it said was a transnational criminal organization, mainly operating in a casino in the Golden Triangle Special Economic Zone of Laos and operated by the Hong Kong-based King Roma Group.
Washington stated that the network is spread across Southeast Asia and is involved in “horrible illegal activities,” including human trafficking, child prostitution, and trafficking in drugs and wild animals.
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