In this context, it has recently become public that the government of Kosovo has decided to apply restrictions on the mining of cryptocurrencies. According to the information available to date, this measure should lead to a considerable reduction in energy consumption over the coming months.
This plan provides for the reduction of energy in different aspects, but one of the most important is that of the mining of cryptocurrencies. It is important to note that this measure was not taken in isolation.
Although Kosovo is not the first cryptocurrency mining country in the world, we cannot deny that this situation could be somewhat problematic, especially for local investors and miners, but if the situation becomes more serious , the overall market could also be affected.
Is Kosovo against cryptocurrencies?
To say that Kosovo is or is not against cryptocurrencies, at least at this stage, is a bit risky. It seems that the government is looking to protect and use electric power for much more necessary things than cryptocurrency mining.
As the representatives of the regulators commented, this measure aims to ensure that citizens’ homes and important businesses are supplied with electricity without problems in the coming months.
What is certain is that if cryptocurrency mining is not banned, it could affect the power supply and many people would experience power cuts, as the country’s electrical system cannot sustain such a powerful pulling force and at the same time the standard power supply.
To enforce this ban, a decree was issued by the government of the capital. Thus, anyone who mines cryptocurrencies, whether with one or more mining machines, is committing a criminal offense.
In fact, the government claims that this measure is badly needed and it is clear that cryptocurrency mining is not among the government’s priorities, so this asset class is increasingly under threat.
This is not the first time Kosovo has banned mining.
It is important to stress that this is not the first time that Kosovo has decided to take such a step. The first time this happened was at the beginning of this year, when the winter in the country was quite harsh. During these months, the heating is turned on in all houses and places in Kosovo, which causes the electrical system to reach its maximum.
Now, if you add to the fact that every house has the heating on, the large amount of energy consumed by mining, the electrical system is easily overloaded, which can cause a lot of problems. Also, at the time, the South East European region was experiencing a series of power shortages. This is why Kosovo has decided to take the plunge, and it seems to be preparing for it again.
Furthermore, Kosovo imports the energy that powers the whole country, which means that it is quite expensive. And what happens is that cryptocurrency mining does not bring enough profit to the country, unlike paying electricity bills during the colder months.
As for the duration of this ban, it is initially 180 days. This is the period agreed by majority vote, but that does not mean it is the only time the ban will be in effect.
The creation of such a ban could create new problems for Kosovo. This has already happened in other countries, and some mining centers decide to connect to the electrical system illegally, which leads to more consequences for the electrical system and involves energy theft, so things could get a bit more serious, but for now the ban is only for 180 days, and it remains to be seen what the next steps will be.
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