Cryptocurrency Mining Banned in Kosovo to Save Electricity

Kosovo's government on Tuesday introduced a ban on cryptocurrency mining in an attempt to curb electricity consumption as the country faces the worst energy crisis in a decade due to production outages.

"All law enforcement agencies will stop the production of this activity in cooperation with other relevant institutions that will identify the locations where there is cryptocurrency production," Economy and Energy Minister Artane Rizvanolli said in a statement.

Due to cheap power prices in Kosovo in recent years, many young people in Kosovo have got involved in cryptocurrency mining.

Faced with coal-fired power plant outages and high import prices authorities were forced last month to introduce power cuts.

European gas prices soared more than 30 percent on Tuesday after low supplies from Russia reignited concerns about an energy crunch as colder weather approaches.

In December, Kosovo declared a state of emergency for 60 days which will allow the government to allocate more money to energy imports, introduce more power cuts, and harsher measures.

One miner, who spoke on condition of anonymity and who has 40 GPUs (Graphics Processing Units), told Reuters he was paying around EUR 170 (roughly Rs. 14,300) per month for electricity and is getting around EUR 2,400 (roughly Rs. 2 lakh) per month in profit from mining.

Coin mining has been on the rise in northern Kosovo, mostly populated by Serbs who do not recognise the state of Kosovo and refuse to pay electricity.

The country of 1.8 million people is now importing more than 40 percent of its consumed energy with high demand during the winter when people use electricity mainly for heating.

Around 90 percent of energy production in Kosovo is from lignite, a soft coal that produces toxic pollution when burnt.

Official figures show Kosovo has the world's fifth largest lignite reserves of 12-14 billion tonnes.

© Thomson Reuters 2022