Luanda - Angola will ban and criminalize cryptocurrency mining activities and other virtual assets in the country, with the aim of safeguarding national energy security.
Cryptocurrency mining is the name given to the digital and online process used to find the "blockchain" (chain of blocks that stores information) on the network, allowing new units of existing digital assets to be validated and launched on the crypto market, such as Bitcoin (BTC) and Ether (ETH).
Cryptocurrencies are digital "money", unlike Kwanza and others that can be exchanged, because they only exist on the internet and allow the user to make financial transactions without needing a bank.
The Proposed Law on the Mining of Cryptocurrencies and other virtual assets, which will go to the final vote at the National Assembly Plenary meeting on the 28th, establishes a prison sentence of 01 to 05 years for anyone who has in their possession computer, communication and infrastructures intended for mining cryptocurrencies.
According to the explanatory report, mining activity puts national security at risk due to overloading of electrical distribution.
The diploma prohibits cryptocurrency mining activities and other virtual assets in the country.
Prohibits the use of any electrical installation licenses for the purpose of mining cryptocurrencies and other virtual assets, as well as the connection to the national electrical system and equipment for the purposes of mining cryptocurrency.
Article 9 of the aforementioned proposal establishes that anyone who uses any electrical installation license for the purpose of mining cryptocurrencies and other virtual assets will be punished with a prison sentence of 03 to 08 years.
In this regard, the secretary of State for Finance and Treasury, Ottoniel dos Santos, noted that as it is not exactly an old matter and studied from various latitudes, it was realized that, for Angola, according to its jurisdiction, "the best would be to inhibit the mining of cryptocurrencies and other virtual assets."
He justified this fact because of a whole set of descriptions that can affect the energy system and its sustainability of energy distribution capacity.
According to the secretary of State, countries like China and the United States of America (USA), which have this reality present in their normative structure, have been struggling with major dilemmas, regarding the possibility of continuing or not this issue in their jurisdictions.
As an example, the Angolan authorities once discovered, in the municipality of Cacuaco, a cryptocurrency production site that consumed an amount of energy equal to or greater than that in the municipality of Ambriz, in the province of Bengo.
The global financial system is struggling with the phenomenon of mining, circulation and transaction of cryptocurrencies outside the control of the sovereignties of States and their Central Banks, raising regulatory problems, which emerge from the complex legal and fiscal configuration of economic activity with virtual assets, high potential for money laundering and terrorist financing.
This has caused negative environmental impacts, especially associated with the high level of energy consumption in cryptocurrency mining factories or farms, which puts national energy security at risk and increases the amount of electronic waste.
The justification report maintains that cryptocurrency mining activity represents, within the public interest, a risk to the security and stability of the National Electric System, considering the high potential for consumption of cryptocurrency mining infrastructures, standing, on average, at around 9.6 MW/day.
The document states that this represents a consumption of approximately three thousand homes, and could significantly affect the supply of electrical energy, especially for domestic consumption purposes.
The country has availability of 4.800 MW/day, of an installed electrical energy production capacity of 6.200 MW/day, with its distribution being the main challenge.
The current demand for energy consumption in the country is 5.500 MW/day, covering the different consumption economies, namely domestic, industrial, commercial and services, with the current effective consumption being around 3.000 MW/day.
It also highlights that the growing expansion of cryptocurrency mining facilities in the country can raise, with great importance, concerns of a technical, productive and economic-social nature, leading to a potential systemic collapse, with repercussions on the national economy.
Measures to prohibit cryptocurrency mining activity, in some countries and restrictive measures in others, place countries like Angola in a vulnerable situation, given the growing demand from legal entities and individuals for territories where there are no restrictive or prohibitive regulations for carrying out these activities.
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