Q&A: Angola can become a hub for cryptocurrency mining in Africa

Angola is a leading African country in cryptocurrency mining. The country ranked third among African countries with the most crypto-mining operations in 2021.  

However, that may be about to change with the Angolan government set to regulate cryptocurrencies and ban crypto mining operations. The government of Angola is currently preparing a bill to this effect. 

Mariblock asked Manuel Euclides, founder of the crypto exchange Yetubit and Bitcoin Angola, a crypto-focused news blog and community of bitcoin enthusiasts, about the regulations and present state of the crypto ecosystem in Angola. 

Here are key highlights of the conversation: 

Mariblock: What is Bitcoin mining like in Angola? 

Euclides: Cryptocurrency mining operations exist in Angola. However, the majority are conducted by Chinese, Vietnamese, and Israeli individuals.  

• They mine in Angola due to our cheap energy in comparison to other regions of the world. Nonetheless, the Angolan government and local police have dismantled many “illegal” cryptocurrency mining operations in recent years in the capital and in other states of the country.  
• Individuals who are discovered are arrested, and their mining machines/ equipment are confiscated by investigative authorities with many of these operations being discovered within companies and industrial zones operated mostly by Asians.

Mariblock: Has the government been taxing these mining entities before now? 
 

Euclides: The government has not imposed any taxation on cryptocurrency mining companies because there is no licensing regulation for the industry. As a result, the government deems all mining activity illegal.  

• What’s worse is that the government does not intend to regulate; rather, it aims to ban all forms of cryptocurrency mining activity. That’s why I’m working with the government to overturn the proposed law so that companies like Yetubit and others intending to operate in Angola can do so through legal channels.

Mariblock: Has there been any environmental or infrastructural damage traced directly to these mining activities? 

Euclides: One of the reasons the government cites for banning cryptocurrency mining is the security of the national energy system and environmental protection, and I agree with the government on this.  

• I believe that everyone involved in both small and large-scale cryptocurrency mining should pay the corresponding amount for their energy consumption. Moreover, if someone intends to establish a mining farm, they should enter into an industrial contract with the national electricity company and pay the amount stipulated by law for the energy consumed. 

Mariblock: In your own opinion, how popular would you say cryptos are in Angola? Do you know for sure if they have been illegalized at any time before now?

Euclides: In recent years, we have witnessed significant growth in the cryptocurrency market in Angola, with individuals adopting them for remittances, hedging against inflation, and purchasing goods and services.  

• Presently, the Bitcoin Angola community stands as the largest crypto community in our country, boasting over 27,000 members, and it was founded by me in 2016. However, there is still ample room for growth, given that the Angolan population is currently around 34 million people, and not even 10% of the population utilizes cryptocurrencies. 
•  Another hindrance to cryptocurrency adoption is the lack of digital inclusion. Angola has approximately 12 million internet users, meaning that more than half of the population lacks access to a mobile phone for cryptocurrency transactions or other financial services. 
• Cryptocurrencies or cryptocurrency mining in general have never been banned in Angola. This is the first proposed law with such a goal in our country.

Mariblock: If these regulations are passed, how do you think they will affect the crypto ecosystem in Angola? 

Euclides: If this law is approved, it will be a significant setback for the adoption of cryptocurrencies in Angola. Companies like Yetubit Exchange will be severely affected. 

• Firstly, innovation in the mining sector will become non-existent, and Angola has great potential to become a hub for cryptocurrency mining in Africa and the world due to our cheap energy. This is the goal of Yetubit, and we are working with regulators to make it happen. 
• Secondly, virtual assets will also suffer if this law is approved, and there will be no innovation in terms of tokenizing real assets in Angola. Besides mining, all virtual assets will also be banned. 
• Thirdly, the government will also lose out on tax revenue from Angolan individuals who invest in cryptocurrencies and cryptocurrency mining companies that would pay for energy consumption. 
• In conclusion, the positive aspect is that the regulator/government is already looking at this sector of activity. The problem lies in the desire to ban it. In my opinion, the government stands to gain much more by regulating and working with strategic companies that understand the local market, such as Yetubit Exchange, rather than banning it.