Image: © ThomasLENNE/Stock.adobe.com
The European country is taking new measures as it faces low energy production and high import prices.
Kosovo’s government has announced a ban on cryptocurrency mining to reduce electricity consumption as it deals with a severe energy crisis.
The country was forced to introduce power cuts in December due to low domestic production and high import prices.
Economy minister Artane Rizvanolli said a technical committee was formed to address the issues Kosovo is facing from the global energy crisis. Based on its recommendations, the country has now prohibited cryptocurrency mining.
“Law enforcement agencies will stop the production of the activity in question with the support of all relevant institutions which will identify the locations of cryptocurrency production,” she said in a statement on Tuesday (4 January).
“These obligations aim to address any sudden or long-term lack of energy production capacity, transmission or distribution capacity in order to overcome the energy crisis without further aggravating the citizens of the Republic of Kosovo.”
Kosovo gets most of its energy from coal, but recent technical faults and cold weather have caused supply issues, forcing the country to import more energy than normal.
Due to cheap power prices in the past, many young people had turned to mining cryptocurrencies. An anonymous source told Reuters he was paying around €170 a month for electricity while earning €2,400 a month in profit from mining.
The Kosovo government’s decision has led to criticism from experts who believe there may not be a legal framework for cracking down on crypto mining.
“There is not enough of a legal basis for the ban of cryptocurrency mining, considering there is no special law that regulates this issue,” legal expert Arber Jashari said told Balkan Insight.
Bitcoin mining consumes around 91 terawatt-hours of electricity annually, which is more electricity than all of Finland, according to a New York Times analysis last year.
But cryptocurrency suffered a serious hit last year when China shut down bitcoin mining farms and ordered financial services firms to cease crypto activities.
Cryptocurrencies have seen losses this week, with the bitcoin price falling below $43,000 yesterday (5 January).
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.
