update 18 September 2021

Laos Legalizes Crypto Trials Amid Financial Crime Concerns

Laos, the southeast Asian country, authorized six companies to take part in a cryptocurrency trial. The government changed its official policy recently. Consequently, the firms will trade and mine in a trial run while the government drafts usage regulations.

This development will assist the country in gaining profit from Chinese miners. Subsequently, they can become an option for those who have suffered from China’s cryptos mining crackdown. 

The firms are Boupha Road-Bridge Design Survey Co., Phousy Group, and Sisaket Construction. Also part of the list is Joint Development Bank, Phongsubthavy Road & Bridge Construction Co., and Wap Data Technology Laos. The mining trial and digital trading currencies will involve Bitcoin, Ethereum, and Litecoin.

Recently the country’s central banks warned firms and individuals against cryptocurrencies. The conservative government’s authorization of Bitcoin mining and trading marks a transition.

Hydropower Resource-rich

The population of the Lao People’s Democratic Republic is about seven million. The country is one of the most hydropower resource-rich countries in Southeast Asia. It is ideal for profitable and sustainable Bitcoin mining. The state has a hydropower potential of 26.5 Gigawatts.

Many analysts have said the move was a logical step for the country. They believe it will make cryptocurrency mining green. Yet, other analysts have warned that criminal gangs could seek to profit from the trade. 

A host of government agencies received distinct tasks. The Ministry of Technology and Communications will lead them. Furthermore, they will be researching and determining rules for crypto regulations in Laos. They include the Ministry of Planning and Investment and the Ministry of Energy and Mines. 

The rest consists of the Ministry of Finance and the Ministry of Public Security. Also, the Bank of Laos and the Électricité du Laos join this select group. The Prime Minister will discuss the regulations proposed by the team at a meeting on September 16 and 17. They will follow the ongoing exodus of mining firms from China.

Laos Fights Black Money

The Laos government promises to step up efforts to fight money laundering. They take this step after coming under scrutiny from the US Financial Action Task Force. Moreover, the UN Office had also investigated them on Drugs and Crime.

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Professor Zachary Abuza commented on this development. Comprehensively, he stated that it is abnormal when countries with poor regulatory records rush. Additionally, Abuza noted the Laotian financial system is not mature enough to adopt crypto. He believes that the community should worry that Laos is blindly rushing into the crypto space.