Lao authorities have legalised mining and trading in cryptocurrencies
Lao authorities have approved six companies to mine and trade Bitcoin, Ethereum and Litecoin. The decision comes a month after the country's central bank warned of cryptocurrency-related risks, Laotian Times reported.
The new business is approved for Wap Data Technology Laos, Phongsubthavy Road & Bridge Construction Co., Sisaket Construction Company Limited, Boupha Road-Bridge Design Survey Co.
The Ministries of Technology and Communications, Finance, Energy and several other agencies, in coordination with the Bank of Laos and the State Electricity Company, will consult on the regulation of cryptocurrencies in the country. The joint report will be presented to the prime minister on September 16-17.
Analysts polled by the Financial Times described the Lao authorities' decision as logical given the surplus of hydropower generated and the crackdown on miners in China.
Some warned that the new line of business could be of interest to criminal gangs. The country's northwest is part of the so-called golden triangle, known as a region of drug production and trafficking.
The legalisation of cryptocurrencies could be attributed to a drop in tourism revenue amid the COVID-19 pandemic. The decline in tourist traffic may also have reduced demand for electricity, while the government has spent a lot of money to build dams on the Mekong River and its tributaries.
Using hydropower for mining will allow Laos to position the industry as carbon-neutral, said David Tuck, a partner at consulting firm Lyriant Advisory.
The Lao government recently promised to step up efforts to combat money laundering. It had previously been criticised by FATF and the UN Office on Drugs and Crime, the publication pointed out.
Recall that the International Monetary Fund saw risks in El Salvador's legalisation of bitcoin payments and the World Bank refused to help the country with the introduction of cryptocurrency.