Luanda - The Angolan parliament on Wednesday approved a bill to ban and criminalise cryptocurrency mining activities and other virtual assets in the country, in order to safeguard national energy security.
The bill was approved with 104 votes in favour, two against and 71 abstentions, at the 4th Extraordinary Plenary Meeting of the 2nd Legislative Session of the 5th Legislature.
Cryptocurrency mining is the name given to the digital and online process used to find new units of existing digital assets on the blockchain network, such as Bitcoin (BTC) and Ether (ETH), allowing them to be validated and launched on the crypto market.
Cryptocurrencies are digital "money", unlike the 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 Draft Law on Cryptocurrency Mining and Other Virtual Assets establishes a prison sentence of between one and five years for anyone who has in their possession computer and communications equipment and infrastructure intended for cryptocurrency mining.
According to the explanatory report, mining activity jeopardises national security by overloading electricity distribution.
The law bans the mining of cryptocurrencies and other virtual assets in the country.
It 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 electricity system of systems and equipment for the purpose of mining cryptocurrencies.
Article 9 of the proposed law establishes that anyone who uses any electrical installations license for the purpose of mining cryptocurrencies and other virtual assets will be punished with a prison sentence of 3 to 8 years.
The reasoning report argues that cryptocurrency mining activity represents, in the public interest, a risk to the security and stability of the National Electricity System, considering the high potential consumption of cryptocurrency mining infrastructures, averaging around 9.6 MW/day.
The document states that this represents a consumption of approximately 3,000 homes and could significantly affect the supply of electricity, especially for domestic consumption purposes
The country has 4,800 MW/day available, out of an installed electricity production capacity of 6,200 MW/day, the main challenge being its distribution.
The current demand for energy consumption in the country is 5,500 MW/day, covering the different consumer economies, namely domestic, industrial, commercial and services, with actual consumption being around 3,000 MW/day.
The measures banning cryptocurrency mining in some countries and restrictive measures in others put countries like Angola in a vulnerable situation, given the growing demand from legal and natural persons for territories where there are no restrictive or prohibitive regulations for carrying out these activities.
MPLA MP, João Pilamozi justified his vote in favour because he considered the guarantee of monetary and fiscal sovereignty to be of the utmost importance, as well as the role of the National Bank of Angola (BNA) as the only entity with the legal authority to issue banknotes and coins in physical and digital format.
He said that the MPLA considers it important and advisable to mitigate the negative effects that are being felt in the world's financial systems as a result of the phenomenon of mining, the circulation and trading of cryptocurrencies outside the control of the sovereignty of states and their central banks.
According to the MP, this has raised the real risk of money laundering and terrorist financing, as well as serious environmental consequences as a result of the high energy consumption of cryptocurrency mining factories or farms, causing consequences for national energy security.
UNITA MP Navita Ngolo said that they voted to abstain because they believe that legislating on the issue is a complex challenge, due to the decentralised and global nature of these technologies, which require a clear understanding.
"We understand that while it is true that there are high operating costs, negative environmental impacts, financial crimes and technical complexity that requires specialised knowledge, it is also true that cryptocurrencies and other virtual assets are potential sources of profit and encourage participation in the network and validation of transactions, among others," she said.
According to the UNITA MP, the generalised ban on this matter makes the legislation ineffective and inhibits technological development.
On Wednesday, the Plenary of the Assembly unanimously approved the Bill to amend the organisation of the Courts of Appeal. DC/SC/DAN/DOJ
