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Venezuela Announces Ban on Bitcoin Mining

Venezuela Announces Ban on Bitcoin Mining

May 20, 2024
Bitcoin Mining

Venezuela Announces Ban on Bitcoin Mining

The Venezuelan government declared an outright ban on Bitcoin mining and has commenced the process of disconnecting mining farms from the national power grid.

According to the Ministry of Electric Power of Venezuela, the disconnection of all Bitcoin mining farms is aimed at regulating "excessive energy consumption" and ensuring that efficient and reliable service is provided to the Venezuelan people. The announcement followed the confiscation of over 11,000 Bitcoin miners in Maracay, as part of an ongoing "anti-corruption" initiative targeting several state officials and institutions.

Local news outlet Voz de América reported that the Ministry of Electric Power stated on Instagram, "The purpose is to disconnect from the SEN (National Electric System) all the cryptocurrency mining farms in the country, avoiding the high impact on demand, which allows us to continue offering an efficient and reliable service to all the Venezuelan people."

Since 2009, Venezuela has been grappling with an electrical crisis, which worsened in 2019 with massive blackouts affecting various cities for extended periods. The ongoing electrical service interruptions have had a detrimental impact on the quality of life and economic activity in the country.

While the government partly attributes the crisis to sabotage, experts argue that the lack of maintenance and investment in the state-controlled energy network is the root cause. The Venezuelan government has promised to modernize the electric grid amidst these challenges.

In response to the Venezuelan government's actions, critics have raised concerns about the purported reasons for the ban. Daniel Batten, a Bitcoin advocate, questioned the narrative provided by both the government and the media, suggesting that the ban could be more closely linked to the country's high levels of corruption and less about grid stability. Batten pointed to Venezuela's low ranking in Transparency International's Corruption Perceptions Index and the history of corruption within PDVSA, the state-owned oil and gas company.

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