Exiled Chinese Bitcoin miners are increasingly turning to Ethiopia as their new base, attracted by the country’s abundant and cost-effective hydroelectric power and a relatively lenient regulatory environment.
Following China’s crackdown on cryptocurrency mining in 2021, Chinese mining firms, previously dominant in the industry, have been exploring alternative locations. Ethiopia’s recent infrastructure developments, particularly the completion of the Grand Ethiopian Renaissance Dam, have resulted in a surplus of low-cost electricity, making it an appealing destination for these miners.
Furthermore, the cool climate of Addis Ababa provides optimal conditions for operating mining rigs, further enhancing Ethiopia’s attractiveness.
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Despite Ethiopia’s ban on cryptocurrency trading, Bitcoin mining has been permitted since 2022. However, Ethiopian officials remain cautious due to concerns about the potential impact of mining activities on electricity distribution and the controversial nature of cryptocurrencies.
Recently, the Ethiopian government temporarily halted the issuance of new operation permits for cryptocurrency mining ventures after granting permits to 21 firms. Officials stated that this suspension will continue until there is clear evidence of progress from the firms already granted permits.
On February 15, the Ethiopian Government’s investment arm, Ethiopian Investment Holdings (EIH), signed a memorandum of understanding with Hong Kong-based West Data Group’s Center Service PLC to initiate Bitcoin mining operations. This partnership falls under a broader agreement for a groundbreaking $250 million data mining project.
