Laos Stops Crypto Power: Redefining Economy, Energy
Laos Halts Power Supply To Crypto Mining: A Turning Point Redefining Economy And Energy
Laos is making a major strategic decision, preparing to completely cease providing electricity to cryptocurrency mining operations by Q1 2026. This move is not merely a shift in energy policy but also reflects the broader goal of this Southeast Asian nation to reallocate valuable resources to industries deemed to have higher economic value and contribute more sustainably to national growth.
The Boom Of Cryptocurrency Mining In Laos
In 2021, Laos unexpectedly became a hotbed for cryptocurrency mining companies, especially after China tightened its regulations on the industry. Laos's appeal stemmed from its abundant, cheap, and environmentally friendly hydropower resources. At the time, the Lao government relaxed policies, allowing six companies to pilot the mining and trading of digital currencies such as Bitcoin, Ethereum, and Litecoin. The objective was to utilize surplus electricity and address the country's massive national debt, largely incurred from hydropower projects.
Cryptocurrency mining activities boomed in Laos, with peak electricity consumption reaching approximately 500 megawatts (MW) during 2021-2022, accounting for a significant portion of the country's total power demand.
Shift In Energy Policy And The Reasons Behind It
However, after just a few years, the cryptocurrency mining industry revealed numerous limitations. Mr. Chanthaboun Soukaloun, Deputy Minister of Energy of Laos, frankly stated that the industry “does not generate equivalent value” compared to providing electricity to more traditional industrial or commercial sectors. This activity created very few jobs and did not foster supply chains beneficial to the domestic economy.
The surge in electricity demand from cryptocurrency mining data centers accounted for over one-third of Laos's total power demand in 2023. This, coupled with declining hydropower output due to low rainfall during the dry season, led to frequent power shortages and blackouts in the capital Vientiane and other areas in 2024. This forced Electricité du Laos (EDL) to double the cost of electricity imports to meet demand.
These issues prompted the Lao government to re-evaluate its energy strategy, moving towards a more sustainable and efficient model.
Laos' New Priority Industries
To achieve sustainable economic growth and create higher added value, the Lao government now prioritizes electricity allocation to the following strategic sectors:
• AI Data Centers: This sector is expected to attract foreign direct investment (FDI), create high-quality jobs, and drive demand for digital infrastructure services.
• Metal Refining: A processing industry with the potential to generate high value from Laos' abundant natural resources.
• Electric Vehicle (EV) Manufacturing: Aligns with global trends in clean energy and carbon reduction, offering opportunities for green industrial development.
• Electricity Exports: Laos, known as the "battery of Southeast Asia" due to its vast hydropower potential, continues to view electricity exports as a crucial revenue source and a driver for the region's clean energy transition.
Current Situation And Roadmap To 2026
Currently, Laos has begun to gradually reduce its electricity supply to cryptocurrency operators. The power consumption of mining farms is now only around 150 MW, a 70% decrease from its peak. Initially, the plan was to completely halt power supply by 2025, but this has been extended to Q1 2026. This decision is due to abundant rainfall over the past year, which boosted hydropower output, allowing Laos to temporarily maintain power supply to the industry while simultaneously increasing electricity exports to Thailand and Vietnam.
Impact And Long-Term Outlook
The cessation of power supply to cryptocurrency mining operations is expected to significantly reduce hashrate in the Southeast Asian region. Mining companies in Laos will face difficult choices: liquidating assets, relocating operations to countries with more favorable energy policies, or finding ways to repurpose existing infrastructure for computing/AI services if they meet the necessary technical and legal standards.
In the long term, this move reaffirms Laos's broader goal of building an independent, self-reliant, and sustainable economy. Laos is focusing on its socio-economic development plans for the 2026-2030 period, targeting economic growth of no less than 5% annually. Priorities include developing agriculture, processing industries, services (especially tourism and logistics), and supporting industries such as electricity, mineral mining, and information technology for the digital economy. The Lao government is also committed to improving the business environment, cautiously managing public debt, and encouraging investment in special economic zones to foster new development momentum.
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