Venezuela Bans Cryptocurrency Mining to Protect Its Power Grid

Venezuela Bans Cryptocurrency Mining to Protect Its Power Grid
Photo by Kobby Mendez / Unsplash

In a bold move to stabilize its national energy supply, Venezuela has officially imposed a ban on cryptocurrency mining across the country. According to government officials, this initiative aims to address the unreliable power supply that has plagued the nation for the past decade. Local law enforcement has already seized approximately 2,000 mining devices, and the Ministry of Energy has proposed disconnecting mining farms from the national electrical grid.

The decision was driven by the urgent need for a stable and reliable power supply in Venezuela, as well as the need to alleviate the strain on the grid caused by the operations of mining farms. The measures are expected to help stabilize the national power supply, which has been unreliable for the last ten years.

This confirmation comes from the National Cryptocurrency Association of Venezuela. According to the organization, the mining of Bitcoin and other digital assets is now prohibited throughout the nation. Local media report that the mining ban in Venezuela is part of a larger state campaign against corruption, which has already resulted in the seizure of about 2,000 mining devices in the country's northern region.

The source notes that Venezuela has been experiencing an energy crisis since 2009, with the situation worsening in 2019—some cities are periodically left without electricity for several days.

It's important to note that this is not the first time the Venezuelan government has acted against cryptocurrency mining. In November 2021, law enforcement seized over 100 units of mining equipment in Paolo-Verde. In March 2023, the government halted the operations of major Bitcoin miners in several regions of the country. Later, Venezuela's Attorney General Tarek William Saab reported that government officials were involved in illegal oil operations facilitated by the National Cryptocurrency Department.

In a related development, Reuters journalists reported in April 2024 that the Venezuelan state oil company PDVSA was using USDT to circumvent sanctions. Following this report, the stablecoin issuer Tether promised to freeze the sanctioned addresses, highlighting the complex interplay between national policies and global finance.