Angola Aims To Emerge As Cryptocurrency Mining Hub Amidst Impending Regulations
The Angolan government has initiated preparations for a bill that seeks to institute comprehensive regulations for cryptocurrencies within its borders.
By Anna B Kiwanuka
Angola, a major player in African crypto-mining activities, is prepared to make moves toward regulation in a move that might reshape its place in the Bitcoin world. The country, which ranked third in Africa for crypto-mining activities in 2021, is now on the verge of enacting regulatory measures while also considering a ban on cryptocurrency mining operations.
The Angolan government has initiated preparations for a bill that seeks to institute comprehensive regulations for cryptocurrencies within its borders. Manuel Euclides, the founder of Yetubit, a prominent crypto exchange gave his insights into the evolving crypto ecosystem and the potential impact of these impending regulations,
Euclides described the current state of cryptocurrency mining in Angola, emphasizing that while mining operations do exist, the vast majority are carried out by persons from China, Vietnam, and Israel. These international miners are drawn to Angola because its energy resources are less expensive than global alternatives. Local authorities, however, have not remained silent in the face of the issue; the Angolan government and law enforcement have taken steps to demolish “illegal” crypto-mining activities in several sections of the country. These operations are frequently uncovered within enterprises and industrial zones predominantly managed by Asians, resulting in arrests and the confiscation of mining equipment.
In terms of taxation, Euclides highlighted that due to the lack of regulatory authorization in the industry, the Angolan government has abstained from imposing taxes on cryptocurrency mining firms. As a result, the government currently considers all mining activities to be illegal. He also raised concern about the government’s preference for outlawing cryptocurrency mining rather than regulating it. Euclides is actively working with the government to promote a regulatory framework that would allow genuine enterprises like Yetubit to operate within the country.
Euclides accepted the government’s rationale for considering a ban, addressing concerns about environmental and infrastructure effects. He agreed that cryptocurrency miners and enterprises should pay for their energy usage, proposing that mining operations create industrial contracts with the national electricity utility to ensure adherence to energy consumption laws.
He highlighted a significant rise in recent years in bitcoin use in Angola, with Angolans using cryptocurrencies for remittances, inflation hedging, and commerce. Euclides started the Bitcoin Angola group in 2016, and it now has over 27,000 members, making it the country’s largest crypto community. However, he emphasized the significant potential for further expansion, given that cryptocurrencies are now used by only a small percentage of the population. Limited digital inclusion owing to limited internet connection is also a barrier to greater adoption.
Euclides gave a thorough picture of the likely consequences of the upcoming regulations. If the proposed law is passed, it might restrict mining innovation and stymie Angola’s desire to become a cryptocurrency mining hub in Africa and beyond. The law’s scope might be expanded beyond mining to include virtual assets, putting a halt to progress in tokenizing real assets as well. Furthermore, the government would forego potential tax revenue from private investors and mining corporations who participate through energy usage charges.
In a parting thought, Euclides urged a reconsideration of the approach, emphasizing that while regulation is crucial, a blanket ban could have adverse effects. He proposed that working collaboratively with local market-savvy companies like Yetubit Exchange might offer more benefits for both the government and the industry, rather than resorting to prohibition.