Chinese Crypto Miners Expand to Africa: Ethiopia in Focus
Chinese cryptocurrency mining companies are increasingly looking to Africa, notably Ethiopia, as a destination for their operations, Bloomberg reports.
Despite Ethiopia’s ban on cryptocurrency trading, the country legalized Bitcoin mining in 2022, a move that has attracted Chinese firms seeking new investment opportunities after China’s crackdown on cryptocurrencies in 2021.
Bloomberg’s investigation reveals that a majority of the companies striking deals with Ethiopia’s state-controlled power utility are Chinese. They are drawn by Ethiopia’s abundant and relatively cheap hydroelectricity, which constitutes 92% of the nation’s power supply.
This, coupled with Ethiopia’s moderate climate, makes it an appealing location for mining operations compared to regions like Texas, where higher temperatures lead to increased cooling costs for mining equipment.
Despite the ban on cryptocurrency mining, some miners in Ethiopia are finding ways to operate by disguising their activities as factories or agricultural projects to gain access to electricity.
READ MORE: Top Crypto Miner Marathon Digital Eyes Africa Expansion
However, similar tactics employed in other countries, such as Iran and Kazakhstan, were quickly shut down by authorities. Additionally, investing in Ethiopia carries risks, including potential political instability, which adds uncertainty to these ventures.
Elsewhere in Africa, there is a growing interest in harnessing renewable energy sources for economic development and environmental conservation.
For example, in the Democratic Republic of Congo, hydropower initiatives not only benefit local communities but also contribute to the preservation of natural resources, such as national parks. This highlights a broader trend across the continent where renewable energy projects are being pursued for their dual benefits of sustainable development and environmental protection.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
