Kosovo bans cryptocurrency mining to tackle power shortages

Kosovo bans cryptocurrency mining to tackle power shortages
By Valentina Dimitrievska in Skopje January 4, 2022

Kosovo’s government has decided to ban cryptocurrency mining in the country due to the energy crisis and power shortages during the winter months, Kosovo’s Economy Minister Artane Rizvanolli said on January 4.

Cryptocurrency mining uses significant amounts of electricity to power computers that solve cryptographic equations to be rewarded with currency. It had become popular in northern parts of the country where residents had received free electricity for years, but the ongoing energy crisis has forced Pristina to seek ways to rein in power use. 

The decision was based on a recommendation made by the government’s technical committee for emergency measures in the energy supply sector, which was established at the end of 2021. So far, the committee has held two meetings to identify and recommend measures to address the negative effects of the global energy crisis.

“Law enforcement agencies will stop the production of crypto currency with the support of all relevant institutions which will identify the locations of such activities,” Rizvanolli said in a Facebook post.

She added that the decision is aimed to address any sudden or long-term lack of capacity for electricity production, transmission or distribution in order to overcome the energy crisis without further aggravating the situation.

Kosovo government decided on December 24 to impose planned daily power cuts for a period of 60 days as part of the emergency measures to deal with the energy crisis.

The Kosovan energy system is facing huge difficulties due to the significant increase in electricity consumption, insufficient domestic power generation and the global energy crisis that has resulted in an enormous increase in electricity prices on international markets.

Before the current energy crisis, mining for Bitcoin in northern Kosovo, mainly populated with ethnic Serbs, had flourished as people in the region had paid nothing for electricity since the end of the Kosovo-Serbia conflict in 1999. 

The number of miners and cryptocurrency investors in Kosovo shot up after the value of bitcoin started to rise rapidly in 2017.

However, in October the Pristina Basic Court on October 11 annulled a decision on the payment of €40mn of electricity bills for consumers from four northern Serb-dominated municipalities, charged between 2012-2017 to the other consumers.