Business

Spanish lawmaker sees opportunity amid Kazakhstan’s Bitcoin mining collapse

As the Bitcoin mining industry matures, it will seek stable political environments and stable energy sources.

Deputy for the Spanish Ciudadanos political party María Muñoz has proposed a bill to make Spain a Bitcoin mining hotspot following the internet shutdown that caused a mining outage in Kazakhstan.

The lawyer and economist Muñoz was steadfast in her support of Spain as a Bitcoin (BTC) destination, in a tweet on Friday: 

“The protests in Kazakhstan have repercussions all around the world but also for Bitcoin. We propose that Spain positions itself as a safe destination for investments in cryptocurrencies to develop a flexible, efficient and safe sector.”

A two-page open letter accompanied the tweet directed at the Spanish Congress of Deputies. First, Muñoz highlighted the significance of the protests and the government’s response which used “all the strength of the police and the army,” before the government switched off the internet to the largest Central Asian economy.

She cited a Cambridge Centre for Alternative Finance study that put Kazakhstan as the second-largest Bitcoin miner worldwide, contributing an estimated 20% of the hash rate in the second half of 2021. The government’s decision to effectively pull the rug out from under Kazakhstan’s Bitcoin miners caused the hash rate to plummet a reported 13.4%.

Read more:  Jack in the Box ends suit against FTX for allegedly stealing its mascot

These events inspired pertinent questions for the pro-Bitcoin lawmaker:

  1. What information does the Spanish government have on the impact of the Kazakhstan internet blackout on the Spanish crypto mining industry?
  2. Will the government take measures to attract investors and miners fleeing the Kazakhstan mining industry?
  3. What data does the government have regarding the energy efficiency of Bitcoin and the growth of the mining industry?

A proven proponent for the Bitcoin network, her party Ciudadanos, or “Citizens,” proposed a national strategy on cryptocurrencies in October last year. Her party seeks to position Spain as a pole for investments into cryptocurrencies from the European Union and the world — and Bitcoin mining could be the catalyst.

As Bitcoin hash rate fluctuations have shown time and again, mining infrastructure is not geographically restricted. China’s mining ban, for example, was to the benefit of Kazakhstan and Kosovo.

Alan Konevsky, chief legal officer at PrimeBlock, explained last year’s mining changes to Cointelegraph: “Mining companies including those that relocated after the China regulatory changes, set up in countries like Kazakhstan and Kosovo because the cost of electricity is much cheaper than in North America.”

Read more:  Dubai regulator announces new regulations for investment tokens

This was shown in Kazakhstan’s growing hash rate in 2021. However, in a premonition to what could take place in Spain, Konevsky goes on to explain:

“If mining becomes a complete non-starter in these countries, we could see miners relocate. This industry is mobile, to a point — but as it matures it requires stability, including stable political climate and stable inputs, including energy.”

Muñoz hopes that Spain harbors these Bitcoin-friendly factors. However, one of BTC’s biggest headwinds may be political. Her tweet inspired ridicule from rival Green party member Ernest Urtasun, a European Parliament member. 

Labeling her proposal a “bad joke” in a tweet, he said BTC mining is “an environmental aberration.” Muñoz and her Citizens party clearly have their work cut out.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button