The Venezuelan government has banned cryptocurrency mining to protect the country’s power grid. The measure was taken following a recent crackdown, which resulted in the confiscation of 2,000 mining devices in Maracay, part of an anti-corruption initiative.
Venezuela’s Ministry of Popular Power for Electric Energy has announced plans to disconnect cryptocurrency mining farms from the national grid. The objective is to regulate excessive energy consumption and ensure a stable electricity supply for the population. Furthermore, the National Cryptocurrency Association of Venezuela confirmed the ban in a post on social network X, highlighting the seriousness of the situation.
The government’s decision takes place in a context of prolonged energy crisis in the country. Venezuela faces recurring blackouts, especially since 2019, which significantly affect citizens’ daily lives and economic activity. Thus, cryptocurrency mining, an activity that requires a large amount of electricity, has been one of the factors that overload the country’s already weakened energy infrastructure.
The clashes of the crypto community in Venezuela
This is not the government’s first action against cryptocurrency mining. After all, in March 2023, Venezuela’s energy supplier closed mining facilities across the country as part of corruption investigations involving state oil company PDVSA. At the time, Attorney General Tarek William Saab revealed that government officials were operating parallel oil activities with the assistance of the national cryptocurrency department.
Furthermore, the crackdown on cryptocurrency mining is part of a broader push against corruption in the country. Several senior officials were arrested, including Joselit Ramírez, former head of the National Cryptoactive Superintendence, a central figure in the corruption allegations.
Other countries have already taken similar decisions
The Venezuelan measure follows a global trend of regulating cryptocurrency mining. Countries like China and Kazakhstan, for example, have also implemented strict rules or outright bans due to the high electricity demands of this activity. In Kazakhstan in 2023, eight major mining operators signed an open letter to President Kassym-Jomart Tokayev, complaining about high energy prices for miners.
In Venezuela, the situation is similar. The country needs a reliable and more stable electrical supply to meet domestic demand. The country’s energy infrastructure is overloaded, and cryptocurrency mining only exacerbates the situation.
Beyond the energy crisis
Although the government insists that measures such as the ban are essential to stabilize the national electricity supply, the instability goes back a long way. Venezuela’s frequent blackouts have deep roots. Maintenance problems, lack of investment and management issues have contributed to the energy crisis.
However, cryptocurrency mining adds a significant load to the power grid, making the situation even more precarious. The government’s recent action is an attempt to mitigate these effects and ensure that the population has continuous access to electricity. Furthermore, the crackdown on cryptocurrency mining is also linked to a broader effort to combat corruption.
Venezuela has been fighting corruption schemes in several areas, including the energy sector. The arrest of senior officials and the confiscation of mining equipment are part of this strategy. The government seeks to restore public confidence and stabilize the economy, which has been severely affected by corruption, economic blockades and the energy crisis.
Source: https://www.criptofacil.com/venezuela-proibe-mineracao-de-criptomoedas/
