Countries around the world are realizing that energy-intensive Bitcoin mining brings serious environmental and economic risks and are taking steps to limit, or even ban, the industry. The rapid growth of Bitcoin mining threatens the stability of national energy systems and drains electricity needed for other basic societal needs including electrification of buildings and transportation to cut carbon emissions. In response, new regulations on Bitcoin mining are being passed to protect electrical grids and climate goals.
Increasingly, national as well as regional and local governments are taking steps to stop, limit, and regulate Bitcoin mining as part of a growing effort to create more oversight and impose guardrails on the opaque and polluting industry. We identified at least eight countries with outright bans on cryptocurrency mining as of April 2024. These laws are essentially aimed at Bitcoin because it is the largest cryptocurrency and most others don’t use Proof of Work (PoW) – the mechanism that requires energy-intensive digital “mining” to verify and secure transactions. There are also other countries with severe limits or bans on using and trading cryptocurrencies that would make it difficult, if not impossible, to do crypto mining.
The most high-profile ban on crypto mining came in 2021 when China, which had hosted nearly three quarters of global Bitcoin mining capacity, shut down the industry. The decision by the Chinese government was part of a broader crackdown on cryptocurrencies as well as an effort to meet national climate goals and direct renewable energy generation to more important social and industrial uses. China’s action had major reverberations as Bitcoin mining companies fled to other parts of the world in search of cheap energy and lax regulations.
Yet China was not the first government to say no to the industry. Some of the earliest bans on Bitcoin mining were driven by concerns about money laundering and maintaining control over national economies and currencies. One of the first efforts was in Iraq when the Central Bank issued a statement in 2017 banning all use and mining of cryptocurrencies. The decision was largely based on anti-money laundering considerations. Another early ban came from Algeria in 2018 when the government blocked the use and mining of all cryptocurrencies. Nepal’s banking regulator and supervisor, the Nepal Rastra Bank, issued a notice in 2021 saying that trading and mining cryptocurrencies was illegal. In 2023, Kuwait banned Bitcoin mining as part of broader rules about cryptocurrencies issued by a financial regulatory agency.
More recently, countries have blocked Bitcoin mining after seeing how the industry can destabilize energy systems and suck-up energy supplies. In 2022, Kosovo outlawed all crypto mining in an effort to conserve electricity during an energy crisis. The most recent ban on Bitcoin mining was passed by the Angolan parliament in April 2024. The law criminalizes crypto mining with the goal of protecting the country’s electrical grid and energy security.
Scandinavia has been the hub for Bitcoin mining in Europe, but governments and utility companies are starting to clamp down on the industry for using too much electricity. For a small country, Iceland hosts a relatively large amount of Bitcoin mining as cheap geothermal and hydroelectric energy has attracted mining companies. However in December 2021, Iceland’s national power company, Landsvirkjun, started turning down new requests to mine Bitcoin due to increasing energy shortages and needing to dedicate energy to vital industries and societal uses. Norway’s relatively cheap electricity also attracted Bitcoin miners, but there are growing efforts to rein in the industry including proposed bans and eliminating tax incentives. An April 2024 law created regulations for data centers, including Bitcoin mines, that involves a framework to register the owners and managers of data centers and the type of services offered. Sweden essentially ended its Bitcoin mining industry when the government eliminated tax incentives for Bitcoin mines and data centers in July 2023. The action was a response to growing energy prices, partially due to the war in Ukraine. Bitcoin mining companies complained that losing low taxes would “kill” the industry – a sign of how much the industry depends on cheap energy and subsidies.
Kazakhstan once had one of the largest Bitcoin mining industries in the world, jumping to second in 2021 when China banned the industry and companies fled to Kazakhstan for cheap, but dirty, electricity and lax oversight. By 2021, Bitcoin miners consumed more than 7% of all the country’s electricity generating capacity which pushed the grid into a deficit. Localized blackouts due to the lack of power sparked mass protests in 2022. The national government quickly sought to avert a crisis and blocked miners from connecting to the grid, although some operations continued illegally. In January 2022 a surcharge was placed on Bitcoin miners for using electricity and in July a law was passed imposing higher taxes on Bitcoin miners based on the average price of electricity to mine Bitcoin. A law enacted in February 2023 further limited Bitcoin miners’ ability to use energy by only letting them use electricity when the grid has a surplus. Mining companies would also need to be licensed with the government, bringing more transparency and oversight to the industry.
In Canada, miners have been drawn to extensive hydropower, but some provinces and utility companies are having second thoughts about the energy-guzzling industry. Several provinces have blocked the expansion of Bitcoin mining because the industry is sucking up valuable energy supplies needed for socially-beneficial industries that create more jobs. New Brunswick issued a moratorium in 2023 on new Bitcoin mines connecting to the grid citing electricity supply strains. Legislation for a permanent ban has also been introduced. British Columbia’s provincial power utility, B.C. Hydro, also announced a moratorium in 2022 on new Bitcoin mines saying expansion of the industry would threaten clean energy and electrification goals as electricity was needed for housing and transportation needs.
With the energy and carbon footprint of Bitcoin growing, and mining companies seeking out cheap energy in new parts of the world, more limits and bans on the industry are likely coming. In Paraguay, for example, legislators have proposed at least a temporary ban on Bitcoin mining given its high energy consumption and limited job creation. Yet, Bitcoin’s energy – an increasingly political – problem could be solved by eliminating PoW mining and transitioning to a new mechanism for verifying transactions that doesn’t require country-sized amounts of electricity.
Special thanks to Veronica Kuzuhara for research support.
