Angola moves to regulate virtual assets and ban cryptocurrency mining

The Angolan government is preparing a bill regulating cryptocurrencies and virtual assets and banning crypto mining activities in the country. The bill seeks to protect the country from the purported environmental hazards commonly associated with crypto mining.  

The details 

• According to an official statement from the President’s office, the proposal to ban crypto mining stems from the need to protect the national electricity system, considering the high consumption of infrastructures in the activity of mining cryptocurrencies 
• In addition, the country wants to limit the circulation of digital currencies and tokens not issued by the country’s central bank. 
• Angola’s minister of finance, Vera Daves, said that the bill would bring virtual assets under the regulation of the country’s Capital Market Commission (CMC). 

Key quotes 

• Daves said:

“Cryptocurrency mining activities and other virtual assets are prohibited in the national territory and are criminalized to illegal possession of cryptocurrency matters, cryptocurrency mining, the misuse of licenses for electrical installations and interference in the national electrical system.” 

• He added:

“The Proposed Law maintains the exclusive competence of the BNA for issuing cryptocurrencies and subjecting it to the recommendation to the Central Bank, also the BNA, of financial transactions using virtual assets.”

Key background 

• While the use of cryptocurrency in Angola is not illegal at present, the government has previously warned against transacting with bitcoin and others and restricted financial institutions from dealing with them.
• In 2021, the country was ranked third among countries with the most crypto-mining operations in Africa. On the other hand, the rise of bitcoin mining has triggered environmental concerns in Angola.  
• Earlier this year, the country’s Criminal Investigation Service detained seven Chinese nationals for mining crypto from a camouflaged brick factory. They were accused of using enormous amounts of electricity from the public distribution system to mine cryptocurrencies. 

Zoom out 

• However, one of the Big Four firms, KPMG, released a report on the environmental, social and governance issues surrounding bitcoin. According to the company, the often-debated speculations around the energy consumption requirements of Bitcoin are exaggerated. Bitcoin mining does not consume as much energy, nor does it make as much carbon emissions as is widely believed. 
• Angola joins a list of several African countries seeking to regulate cryptocurrencies and other virtual assets within their borders.

Editor’s note: The original text was written in Portuguese and translated using ChatGPT.