Laos strays from China’s path with a remarkable decision that sees the tiny Asian country bring a three-year ban on mining and trading to an end. In light of this, licenses have been given to six firms to engage in crypto mining and trading within the country, according to reports.
Back in 2018, the Southeast Asian country had proscribed cryptocurrency toeing the path of hostility just like China. Laos reiterated the position last month. However, the country is making a U-turn on its decision and is contemplating pursuing a new favorable position on cryptocurrencies. Laos has proposed drafting out regulations that will guide crypto usage among locals.
Laos to Develop Laws for Regulate Crypto Usage
The new licenses will permit the six selected firms to mine and trade cryptocurrencies such as Bitcoin, Ethereum (LTC) and Litecoin (LTC). The incoming law will control activities surrounding these cryptocurrencies.
Laos’ apex bank will be collaborating with other stakeholders in the country such as the power agency, ministry of technology and communications for the drafting of the proposed regulations. Reports have also indicated that the outcome of the collaboration between the aforementioned stakeholders will be one of the talking points at the forthcoming Prime Ministers’ meeting scheduled to hold later this month.
This switch comes on the heels of a report issued last month by the Bank of Laos. In the report, the apex bank had reminded Laotians of its 2018 ban, noting that cryptocurrencies were still illegal and could not be used to make payments within Laos. Bank of Laos also alleged that cryptocurrencies were not backed by external currency reserves Notwithstanding, several individuals and businesses did not comply with the directive of the bank.
Laos To Replace China As Mining Powerhouse
It appears that other countries are looking to pick up the gauntlet from where China left off. China has always been dispassionate about private digital currencies. Its May mining ban was a pointer to this. The ban was followed by a mass exodus of miners from China. Until the ban, China boasted 75% as its share in the global hash rate. Sadly, that has dropped to 46%.
Interestingly, this could be an advantage for other countries around China. Even Laos aims to capitalize on this to become the ‘Battery of Southeast Asia’ by creating plenty of dams with hydroelectric capability on the Mekong River. The Asian region could also increase its mining hash rate if Laos follows up on its crypto mining plan. With a legal framework being considered, locals in Laos can now conduct transactions without hiding from authorities.
Meanwhile, China has followed an alternative path with a lined-up central bank digital currency- Digital Yuan- almost due for launch.