Kosovo has become the latest nation to ban cryptocurrency mining in an effort to curb energy consumption following a series of blackouts across the country.
Minister of Economy, Artane Rizvanolli, said the decision was based on recommendations made by Kosovo’s Technical Committee on the Emergency Measures in Energy Supply.
In contrast to a similar policy passed in China, Kosovo’s ban on cryptocurrency mining aims to help limit the affects of the ongoing energy crisis affecting a number of European countries, including Kosovo.
The country, which was declared independent from neighbouring Serbia in 2008 and has been considered a cryptocurrency mining haven due to its low electricity bills, is currently struggling with what is considered to be the “worst energy crisis in a decade”. The government has introduced power cuts and a national state of emergency that is expected to last until late February.
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In a statement shared on Facebook, Rizvanolli said that the ban will also include identifying “the locations of cryptocurrency production”. These are considered to be based in northern Kosovo, where the country’s Serb minority, many of whom are Serbian government sympathisers and don’t acknowledge Kosovo as an independent state, partake in cryptocurrency mining while also refusing to pay the electricity bills, according to BBC.
The news comes days after the Iranian government reportedly placed a temporary ban on all cryptocurrency mining in order to avoid electricity blackouts, according to BNN Bloomberg. Expected to last until 6 March 2022, the ban aims to free up 209 megawatts of power.
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Although mining and trading cryptocurrencies is legal in Iran, the country’s banks and financial institutions have been prohibited from dealing with cryptocurrencies since 2018 in an effort to clamp down on money laundering and limit routes for funding terrorism.
Cryptocurrencies have also been criticised due to its negative environmental impact, with a recent University of Cambridge study finding that only 39% of the electricity powering the Bitcoin mining process comes from renewable sources, with a hefty 61% coming from power stations fuelled by natural gas, oil, and coal.
In May 2021, New York lawmakers submitted a bill banning cryptocurrency mining operations for three years, citing concerns that “associated greenhouse gas emissions will irreparably harm compliance with the Climate Leadership and Community Protection Act in contravention of state law”.
