Kosovo has banned digital currency block reward mining amid power shortages as the country grapples with a very cold winter. The country has been experiencing frequent blackouts and is cutting down on energy supply to non-essential sectors of the economy, with the miners becoming the latest casualties.
Eastern Europe has been going through the winter season for the past month. And as it always happens, a lot of energy is going towards heating homes at the expense of other sectors of the economy. In Kosovo, the situation has worsened as the cold weather knocked out local power plants. The government has been forced to increase its energy imports from neighboring countries such as Serbia, but even this isn’t enough to offset the lost energy capacity.
In a statement, Kosovo Minister of Economy Artane Rizvanolli said the ban is intended to address both the short and long-term energy shortages and ensure the country’s economy survives the current energy crisis.
In addition to denying the miners electricity, the government will put some resources towards identifying digital currency miners who defy the directive and continue with their operations. The move aligns with similar efforts by the Chinese government, which has deployed significant resources to identify and stamp out miners, including providing incentives for people who report the miners and setting up dedicated hotlines to report the illicit miners.
Minister Rizvanolli said the decision to ban block reward mining came after recommendations from the Technical Committee on Emergency Measures for Energy Supply. The committee, which was established in December 2021 after the country started experiencing frequent blackouts, is composed of a number of ministers, the Kosovo Energy Corporation, and representatives from other government offices.
The temporary halting of block reward mining activities is nothing new. Iran banned mining in May 2021 and lifted the ban four months later in September. Towards the last days of 2021, national grid operator Tavanir announced that it was cutting off the power supply to miners once again.
For Kosovo, the energy shortage was serious enough to warrant a state of emergency, which the government declared back in December for two months. The constant blackouts have led to unrests and protests, with many asking for the Minister of Economy to step down. And while the Minister has banned block reward mining, it’s unlikely that this alone will solve the energy crisis. After all, Kosovo only accounts for 0.01% of the global BTC hash rate.