Kuwait reiterates its position on mining illegality
Kuwait declares crypto mining illegal, citing strain on power grid.
Kuwait’s Ministry of Interior has issued a formal warning against cryptocurrency mining, declaring the practice illegal and unlicensed under several national laws.
In a press release published on X (formerly Twitter), the ministry said that mining operations are placing a severe strain on the country’s power infrastructure, citing more than 1,000 active mining sites.
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The crackdown follows coordinated inspections by the Ministry of Electricity, Water, and Renewable Energy, along with the Communications and Information Technology Regulatory Authority (CITRA), the Public Authority for Industry, and Kuwait Municipality. Authorities cited legal violations under multiple laws, including the 1996 Industry Law, amendments to the Penal Code, and regulations overseen by CITRA and the municipality.
The Ministry of Interior emphasized that crypto mining “depletes electricity power and increases the load on the power networks,” posing a risk of blackouts and public safety issues. Offenders have been urged to cease operations immediately, with officials warning that continued violations will result in legal proceedings.
Trading and payments in crypto remain prohibited
Kuwait has long maintained a firm stance against digital assets. The Ministry of Finance does not recognize cryptocurrencies as legal tender, and the Central Bank of Kuwait (CBK) prohibits banks and licensed institutions from engaging in cryptocurrency-related activities. This includes trading, payment processing, and acting as intermediaries.
The CBK has also issued consumer advisories warning of the risks associated with speculative crypto trading, particularly in assets like Bitcoin.
Mining remains widespread despite restrictions
Despite its strict regulatory framework, Kuwait has been a hotspot for crypto miners due to its low energy costs. In 2023, some reports named it the world’s most cost-effective jurisdiction to mine Bitcoin, with estimates suggesting a production cost of just $1,400 per BTC — significantly lower than the $18,000 estimated cost in parts of the United States.
However, officials now say the energy savings come at too high a cost to national infrastructure. Global data compiled by Best Brokers shows Bitcoin mining consumes more than 140,000 GWh per year — more than the total electricity usage of countries like Malaysia or Ukraine.
With increasing pressure on the grid and continued regulatory resistance, Kuwait’s stance on crypto appears set to remain firm. Those operating mining farms in the country have been advised to shut down or face legal consequences.
Recently we wrote that Pakistan is taking a bold step to transform its energy surplus into economic opportunity, launching a national strategy to use excess electricity for Bitcoin mining and AI data centers.
