Kuwait is seeking to ease pressure on the national grid ahead of the country's hot summer, including tough measures against cryptocurrency miners.
The Kuwait Ministry of Home Affairs said in a statement that last week, the authorities launched a "wide-scale" security campaign targeting homes used to mine cryptocurrency, an activity it said was illegal.
The ministry said that cryptocurrency mining activities "depend on illegal electricity mining and can cause power outages, affecting residential areas, trade and services, posing a direct threat to public safety".
Kuwait has banned cryptocurrency transactions but no law mentions mining activities.
Kuwait, a member of OPEC (opening for oil exporters), is struggling with a serious power crisis due to population growth, expanding urbanization, rising temperatures and maintenance delays at some factories.
Electricity prices in this country are extremely cheap and the government has called on people not to waste electricity because the need for cooling during hot summer weather is putting pressure on the already overloaded power grid.
Sharing with Reuters, a source from the Kuwait Electricity Ministry shared that cryptocurrency mining is the main cause of the power crisis, but not the only factor.
cryptocurrency mining is extremely energy-consuming. Authorities from countries such as Kosovo and Russia have taken measures to limit this to prevent power shortages. Miners tend to set up their offices in places with cheap electricity prices and often in areas with colder climates, where it is easier to cool their servers.
Researchers at the University of Cambridge estimate that by 2022, Kuwait accounted for only 0.05% of Bitcoin mining activities worldwide at that time.
While there is no data on the amount of electricity used by cryptocurrency miners in Kuwait, "a very small fraction of the total Bitcoin mining network can have a significant impact on Kuwait's relatively small total electricity consumption," said Alex de Vries-Gao, founder of Digiconomist, a research project that tracks the energy use of cryptocurrencies.
The Kuwait government's measures will target homes in Al-Wafrah, the southernmost region of the country, where the Electricity Ministry previously said that there were about 100 homes used to mine cryptocurrency, some of which consumed 20 times more than normal electricity. After drastic actions, energy consumption at Al-Wafrah has decreased by 55% last week.
The Kuwait Central Bank has warned against investing in cryptocurrencies. The country's approach to the sector is different from some of its neighbors that have already recognized the sector.
