Sebastian Sinclair

State-run Electricite du Laos (EDL) revealed last week it will withdraw electrical supply to domestic crypto mining operations, marking a stark deviation from its pro-crypto stance in 2021.&nbsp;



The sudden change underscores the challenges Laos faces as it grapples with a severe energy crisis exacerbated by drought conditions, <a href="https://en.vietnamplus.vn/laos-stops-power-supply-to-cryptocurrency-mining-businesses/266967.vnp">local media</a> reported Saturday.



EDL is responsible for overseeing the country&#8217;s electricity production, transmission and distribution infrastructure. It also handles the import and export of electrical power through the country&#8217;s national grid.



In November 2021, Laos initiated regulations to formalize and encourage crypto mining and trading. The move was seen as an attempt to seize on a <a href="https://www.ft.com/content/3a820200-0128-42b3-be6c-f5abd6381efa">vacuum</a> left in the wake of China’s crackdown on crypto mining.



Issued by Minister of Technology and Communications Boviengkham Vongdara, the rules stipulated crypto businesses be entirely <a href="https://laotiantimes.com/2021/11/15/government-issues-regulations-for-cryptocurrency-miners-and-platforms-in-laos/">Lao-owned</a>, financially stable and required to deposit a $5 million security with the Bank of Laos — the nation’s central bank.



The regulatory framework also incentivized energy consumption in crypto mining, setting a minimum usage of 10 megawatts, to be supplied by EDL under a renewable six-year contract. It even provided exemptions on electricity transmission fees and import taxes for the state-owned supplier.



Now, in the wake of extreme drought that has severely impeded the nation&#8217;s hydropower plants responsible for 95% of the country&#8217;s electricity, EDL has reprioritized its power allocation.



The move aims to bolster local electricity supply while also earmarking large volumes for export to Thailand&#8217;s Electricity Generating Authority ahead of the region’s dry season next year.



This policy reversal also follows the government&#8217;s acknowledgment of unmet debt obligations within the crypto-mining sector, per the reports.



An abrupt shift casts doubt on Laos&#8217; strategy for balancing the growth of emerging technologies with pressing infrastructural needs, including the consistent provision of electricity to both its domestic population and export markets.



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