Kuwait, once considered one of the cheapest nations for Bitcoin mining, has taken action against the practice, citing the growing electricity demands amid a worsening energy crisis.
Crypto miners are once again facing regulatory pressure due to their high energy consumption. On Thursday, May 1, Kuwait launched a crackdown on crypto mining sites, accusing them of placing significant strain on the nation’s electric grid.
The country’s interior ministry initiated a widespread operation targeting homes involved in crypto mining. Local media reported that the sweep led to investigations of more than 60 individuals suspected of participating in crypto mining.
Crypto mining operations “constitute an unlawful exploitation of electrical power … and may cause outages affecting residential, commercial and service areas, posing a direct threat to public safety,” the ministry said.
Kuwait Grapples with Surge in Energy Demand
The nation made the move in response to recurring blackouts, which stem from rapid population growth and rising temperatures. In May, temperatures range from 32°C (90°F) to 39°C (102°F), putting considerable strain on the electric grid. The widespread use of air conditioning is a major contributor to the overall electricity demand.
Kuwait ranks among the top 20 countries worldwide for the lowest electricity costs. A report states that the country charges only 2.9 cents per kilowatt-hour—far less than most industrialized nations.
Due to electricity being one of the most crucial inputs in proof of work mining, locations like Kuwait have seen miners operating more competitively than in many other countries. As a result, it has become an attractive destination for crypto miners, emerging as one of the most affordable places to mine cryptocurrencies.
While crypto mining was not the sole contributor to high energy consumption, Kuwait was not the only country to impose a ban on the activity. Previously, Russia and China, both nations with affordable energy, also prohibited mining. Russia attributed its ban to the strain on the electric grid, while China enforced the ban as part of its commitment to transitioning to green energy.
