mekoneye.com By Võ Kiều Bảo Uyên 17 November 2025 at 14:50
Four years after it first approved Bitcoin mining projects powered by surplus hydropower, Laos is beginning to rethink whether the energy-hungry industry — now linked to massive transnational cryptocurrency scams — is worth keeping alive
High-rise buildings stand in the Boten Special Economic Zone in northern Laos, near the border with China. The area is suspected to be a hotspot for scam operations, including schemes that store fraudulent money in crypto for later laundering. PHOTO: Thanh Hue
Houaphanh Province, LAOS — Bitcoin is a world far away from 19-year-old Chai, an ethnic Hmong and a college student who has never owned a computer.
But its shadow has already crept into his mountainous village, where power outages are common—often a side effect of the vast energy demands elsewhere, including cryptocurrency mining.
Despite the national grid being connected to his remote community seven years ago, he and his classmate studied by candlelight, oil lamp, or mobile flashlight at night to prepare for university entrance exams. The blackout worsens during the dry seasons when hydropower drops.
“When the phone batteries died and the candles burned out,” he recalled, “we closed our books, went to bed, and woke up at 5 a.m. to study.”
Lao officials say the worsening outages are tied to the rise of crypto mining — an industry the government once believed would bring quick revenue to the country, weighed down by debt.
Crypto mines, mostly Bitcoin, consumed over one-third of Laos’s entire electricity output last year.
A boom in data centers for Bitcoin mining in Vientiane contributed to a 50% increase in electricity demand in the first six months of the year, according to a World Bank practice manager presenting at a UN sustainability forum earlier this year.
This growing digital industry, which residents like Chai may never see in person, is shaping the light and darkness of everyday life.
Exodus of miners from China, and beyond
The boom started in September 2021, when Laos’ neighboring China — at the time, then the world’s crypto capital — banned all cryptocurrency activities. A wave of crypto miners fled abroad in search of cheap electricity and looser regulations.
Vientiane quickly launched a pilot program for crypto mining and trading, such as Bitcoin, Ether and Litecoin, a few days after Beijing’s ban. It is the first government in Southeast Asia to officially endorse the industry.
Officials soon offered incentives, including discounted electricity fees during the rainy season, tax-free imports of mining rigs, and zero transmission fees. Each license charges a crypto mining company roughly $500,000.
Crypto miners are taxed at a rate of US$1 million per 10 megawatts of electricity consumed, not including electricity payments.
The Lao government hoped this new revenue could help pay public debt, raise civil servant salaries, and boost post-pandemic recovery. In 2022, it predicted 2,000 billion kip — about $180 million — from crypto mining alone.
As a result, fifteen companies have received licenses to mine and trade cryptocurrencies since late 2021, despite authorities previously issuing a warning to citizens about the significant risks of digital currencies, such as their “potential use in money laundering” or for“the funding of terrorism.”
One of the six mining companies publicly named by the government operates as a joint venture with Thai investors. At another, the Nam Ngum hydropower-backed crypto farm, workers identified themselves as Chinese to Mekong Eye.
However, what seemed like easy money soon revealed problems policymakers didn’t foresee.
During the dry season, when Mekong river levels drop — especially in years of severe heat and drought — hydropower plants no longer produce surplus energy.
The so-called “battery of Southeast Asia,” as government officials like to refer to the country, has now found itself short of electricity and forced to import power from neighbors at double the export price, pushing the country’s national power utility, Électricité du Laos, further into debt.
The generous incentives have also attracted criminal activities that defraud many people globally.
Among the licensed crypto firms, Warp Data was accused by U.S. authorities of being part of a network of shell companies controlled by the founder of the Cambodian business empire Prince Group, Chen Zhi.
Chen allegedly masterminded massive cryptocurrency scams involving forced labor camps, while his co-conspirators funneled stolen money into large-scale cryptocurrency mining operations.
Warp Data’s Laos-based facilities allegedly produced Bitcoin in a manner that was effectively disentangled from revenue gained by scams.
The operation blended illicit funds with newly mined Bitcoin, routing large quantities into wallets controlled by Chen. Ultimately, Warp Data reportedly helped convert a significant amount of stolen assets into Bitcoin, obscuring their origins.
Laos’ cabinet member expected mining rigs to turn surplus hydropower into digital gold. Today, they stand on uncertain ground, as cabinet members question whether crypto farms provide any real benefit to the country.
Power demand surges beyond forecasts
The logic behind Laos’ crypto gamble once sounded simple: the country built more dams than it could ever use. Hydropower accounts for nearly 76% of the country’s energy mix, while coal makes up about 24%
The rush to build dams has resulted in mounting debt, and many of them were financed by Chinese investors seeking a new frontier of infrastructure development.
Meanwhile, much of its hydropower sat idle during the rainy season. Therefore, if surplus megawatts could be sold to crypto miners instead of being wasted, why not do it?
Crypto miners often argue that hydropower is ‘clean,’ renewable, and nearly zero-carbon compared to coal-fired electricity. But in Laos, the reality is more complicated.
Forests have been cleared to make way for reservoirs. Communities have been moved, mostly without fair compensation. Fish migration has been disrupted. Dam operations alter water flows in ways that ripple downstream into Thailand, Cambodia, and Viet Nam’s Mekong Delta.
One crucial factor was missing from that equation: Bitcoin mining runs on a proof-of-work system that devours electricity.
Around the world, thousands of high-powered computers compete 24/7 to solve cryptographic puzzles, with new Bitcoins as rewards. The more miners join, the harder the puzzles become — and the more energy the system consumes. What began as a mechanism for digital trust has grown into one of the planet’s most power-hungry technologies.
In 2025, the global Bitcoin network is projected to consume 204.44 terawatt-hours of electricity — roughly the same as Thailand’s annual usage — while generating remarkably few jobs.
Following the promotion of crypto mining, Laos’ national electricity consumption surged 45% between 2022 and 2024 — far exceeding forecasts while it had predicted only a 21% rise over that period.https://flo.uri.sh/visualisation/26160552/embed
From surplus energy to blackouts
Another factor Laos doesn’t appear to have anticipated in all this was climate volatility.
Laos has endured two consecutive years of extreme heat during 2023 and 2024 that increased domestic demand and forced a sharp rise in electricity imports as hydropower production decreased.
Despite exporting nearly 69% of its electricity production in 2023, Laos also purchases electricity from neighboring countries, with import volumes doubling from the previous year, particularly during the dry season.
These imports do not fully bridge the domestic shortfall, as the purchased electricity reaches only border towns that are not yet connected to the national grid.
Combined with transmission lines and transformers that haven’t been upgraded for decades, shortages now threaten the country’s energy security. According to the World Bank, national electricity access in Laos has dropped from nearly 100% in 2022 to around 96%.
“Cryptocurrency mining creates additional electricity demand that may place a burden on the power system, not generate profit” said Keith Barney, head of the Resources, Environment and Development Group at Australian National University.
“Electricité du Laos’ finances are in a very difficult situation. The state utility is already being forced to sell off assets, including the high-voltage transmission grid and stakes in other dam projects. Cryptocurrency mining may have been adding to EdL’s financial crunch.”
Whether bitcoin mining helps or harms Electricité du Laos’ finances depends not just on seasonality, but also on where the farms are built.
Some areas in Northern Laos still have surplus power that cannot be sent to Vientiane because the high-voltage grid remains incomplete. But farms near major hubs like Vientiane or Pakse are far more likely to strain domestic supply thereby requiring Thailand imports, Barney added.
It isn’t only the government that sees cryptocurrency as a way out of a dire economic situation. For many young Lao, Bitcoin appears more dependable than the traditional economy.
In a country hit by soaring inflation and a weakening currency, the world’s most famous digital coin has become — for some — not just speculation, but a form of financial insurance.
Edy, 32, a bank worker in Vientiane, has invested over 70% of his monthly salary into Bitcoin for the past five years.
“No matter how hard I work, I never get ahead. But Bitcoin gives me a chance to grow my money,” he said. He meets friends regularly to swap trading strategies, a network that now includes veteran traders in Thailand.
Bon, 28, who owns a restaurant, has a different reason for betting on Bitcoin.
“If the economy gets worse, I can’t take real estate with me if I leave Vientiane, but Bitcoin can go anywhere,” he said. His restaurant, which attracts foreign tourists, even accepts crypto payments these days.
“Companies with huge capital mine [crypto], and people here with less money trade it instead,” Bon added, showing a photo of a billboard in Lao language advertising Bitcoin mining machines from a Singapore-based company set up near Vientiane’s airport several years ago.
It’s not easy money
Despite early promises, revenue from crypto mining in Laos remains murky. In September 2023, the government admitted that crypto operations had failed to ease national debt.
The year 2022 was brutal for crypto: token prices collapsed and Bitcoin alone lost more than 60% of its value. Many companies were unable to pay electricity bills.
Prime Minister Sonexay Siphandone later acknowledged that while some firms generated meaningful revenue, others fell behind on payments, owing roughly US$20 million. The government decided to cut the debt by half, citing that Bitcoin prices had dropped more than 50% since the fee structure was set.
Local media reported that the Bank of Laos stopped issuing loans to crypto firms from January 2023 to reduce financial risk.
Bitcoin’s supply grows through mining, but only up to a fixed limit of 21 million coins. Roughly every four years, the network triggers a “halving,” cutting mining rewards by half — most recently in April 2024.
For miners, that means running the same hardware and consuming the same electricity, but receiving only half the Bitcoins they once earned.
When prices stay high, halving can trigger an investment rush as miners rush to protect profit. But when prices fall or electricity costs rise, many mines become unprofitable almost overnight, leaving servers idle and investors stuck with huge power bills.
“It’s essentially gambling with the country’s resources,” said Alex de Vries-Gao, Researcher at the Institute for Environmental Studies at the Vrije Universiteit Amsterdam.
“There’s enormous financial risk, not just because the software can change, but because the entire industry depends on a wildly volatile asset. Bitcoin miners currently earn 3.125 coins for each block they process — a fixed reward, but one whose value swings with the market.”
“When prices collapse, miners vanish as quickly as they arrived,” he added. “Ultimately, it’s a bet on endless growth — and the question is whether that’s wise government policy.”
The question of beneficiaries
Even as Bitcoin prices rebounded following Donald Trump’s second electoral victory in 2024— amid his promise to boost the U.S. crypto industry — little of that windfall has trickled down to Laos’ aging power grid.
Instead, the government approved a plan to raise domestic electricity prices through 2029, sparking public anger in a country already burdened by inflation and a depreciating fiat currency, the kip, as authorities seek to reform the power infrastructure.
In Chai’s village, where in many homes a single light bulb was the only electrical appliance, households now go to bed earlier to save electricity. “My family also limits the use of the electric stove,” he said.
In Vientiane, residents complain of soaring monthly bills. Many have cut the number of appliances at home or found creative ways to conserve power.
“I work through lunch break to avoid staying home too much and using the fan at home,” said Sua, 25, a ride-hailing driver.
At a small supermarket in the capital, the owner’s power bill has nearly doubled since last year. “I can’t raise prices or I’ll lose customers, the economy is tough and people are already cutting back,” she said. “But if this continues, there will be almost no profit left.”
Meanwhile, Laos’ crypto future remains uncertain. In August, at a high-level meeting in Vientiane, the Ministry of Technology and Communications reaffirmed plans to expand digital-asset mining as a “new use” for surplus hydropower, casting it as a pillar of sustainable growth.
With dwindling fiscal reserves, officials frame mining as a path toward steady revenue and greater financial resilience. But within weeks, the government signaled a dramatic reversal.
Deputy Energy Minister Chanthaboun Soukaloun told Reuters that Laos is considering cutting electricity to crypto miners by early 2026, as the industry delivers few benefits and generates very few jobs.
The country will redirect supply to industries that “contribute more to economic growth,” including AI data centers, which have the potential to consume even more power and water resources than crypto, depending on scale.
He added that the decision to halt electricity supply to miners would have taken effect this year, if not for unusually abundant rainfall.
“In political systems marked by corruption and a lack of transparency, it’s often unclear who truly benefits from Bitcoin farms,” said Win Ko Ko Aung, Human Rights Fellow at the Bitcoin Policy Institute. “In Laos, the biggest winners are those with government connections because only they could get permits.”
Energy demand outpaces residents
Whether Laos will fully pull the plug on crypto mining by early 2026 remains unclear. The government continues to ramp up electricity production — not only to attract foreign investors and strengthen domestic energy security, but also to sell power across the region.
Singapore, home to hyperscale data centers, has stepped up imports from Laos. Viet Nam, which hopes to become a regional data hub, is buying more as well.
Myanmar, where Thailand recently cut electricity to several border areas to disrupt scam centers, has also increased its power purchases from Laos.
Plans are underway to fast-track large-scale solar and wind projects and secure financing for more dams. Perhaps more worryingly, the country is also looking to diversify its energy mix by adding coal.https://flo.uri.sh/visualisation/26165682/embed
Earlier this year, construction began on a $4 billion coal-fired power plant in Sekong Province, southern Laos, with electricity destined for Cambodia.
Électricité du Laos has nearly completed a grid extension linking to a transmission line on the Laos–Cambodia border, supporting Cambodia’s newly signed agreement to purchase electricity over 30 years.
Meanwhile, the US Scam Center Strike Force is targeting cryptocurrency-linked investment fraud in the Mekong region, going after key leaders and Chinese organized crime affiliates in Cambodia, Laos, and Myanmar.
The region’s growing cross-border data centers and electricity exports have raised concerns that they could provide infrastructure exploited by networks to launder money and run scams.
“If they want to supply 24-hour electricity for crypto mining or data centers, a coal-fired power plant might be the answer,” said Witoon Permpongsacharoen, director of the Mekong Energy and Ecology Network. “But it would be going against the global trend to stop using them.”
Even wind power, long seen as a clean option, carries its own footprint. The Monsoon Wind Power Project — the largest in Southeast Asia, stretching across the hills of Sekong and Attapeu — comes with environmental costs of its own.
Funded through a US$692 million loan package led by the Asian Development Bank, it is often hailed as proof that Laos can pivot to renewables. Yet developers admit that parts of the site are located in forest areas that shelter wildlife. Once completed, its output will be exported to Vietnam.
Earlier this year, a new hydropower plant in Houaphanh province — Chai’s home — also began selling electricity to Viet Nam. The deal brings in revenue for the state and energy security for a neighbor. But for local people, it is not guaranteed that the lights will stay on.
Chai is the first child in his village to attend high school and later pass exams to enter a college in Vientiane. His dream is to return home after graduation and open a small supermarket — something the children in his village have never seen, let alone been inside.
“I’ll work in Vientiane first to save money to buy a big fridge to store goods,” he said, practicing Chinese characters for an upcoming exam at the school. “I just hope the power won’t keep going out by then.”
*Note: Names of Lao residents are pseudonyms for safety reasons.
The report was produced with support from Internews’ Earth Journalism Network and The Pulitzer Center’s AI Accountability Network. It is part of the “Dark Side of the Boom” collaborative reporting project on resource-intensive digital technology in Asia
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