Bitcoin mining is banned in Kuwait as the grid reaches a breakthrough point
According to Reuters, the Kuwait government has begun cracking down on cryptocurrency miners across the country, accusing them of exacerbating power shortages as summer approaches. The Home Office announced last week that it would be a “widespread” security campaign for homes that have been converted to mining centers.
Power grid under severe strain
Kuwaiti authorities said crypto mining operations “represent illegal development of electricity” and could trigger power outages that affect residential, commercial institutions and critical services. The Home Office added in the announcement that the action “posed a direct threat to public safety.”
The power shortage in the Gulf countries is a result of a number of reasons: increased population, urbanization, rising temperatures and delayed maintenance at current power plants. Authorities focus on the southern part of Al-Wafrah, with about 100 houses said to be used for mining operations.
Video: Kuwait bankruptcy crypto miners operate in residential areas#KUWAIT #cryptominning #cryptocurrency
– Arab Times – Kuwait (@arabtimeskuwait) April 25, 2025
Mining business uses cheap electricity
According to an early report from the Ministry of Electricity, some mining facilities in Al-Wafrah are used 20 times the average electricity required for ordinary houses. The highly subsidized cheap electricity in the United States has made miners hope to make huge profits.
A rendering of a crypto mining operation. Image: Gemini Imagen.
Legal gray area fuel issues
Although Kuwait bans cryptocurrency trading, the country lacks legislation to manage mining operations. The vulnerability allows miners to work in legal obstacles, even if the central bank warns not to invest in cryptocurrencies.
This case illustrates how crypto mining can find areas with low power costs. The same trend has been observed globally, from Kosovo to Russia to limit mining to avoid power shortages.
Early results show a great impact
The Ministry of Electricity announced that Al-Wafrah’s energy consumption has dropped by 55% after last week’s crackdown. This sharp decline suggests that the repression has been successful in its initial stages.
Kuwait’s cryptocurrency policy is very different from that of some neighbors. Dubai opened this week as Kuwait suppressed mining, with key crypto conferences attended with Eric Trump, son of U.S. President Donald Trump.
The University of Cambridge study estimates that Kuwait only causes 0.05% of global Bitcoin mining in 2022. But even this small percentage could have a significant impact on Kuwait’s relatively small power grid, experts say.
“This will only account for a small part of the overall Bitcoin mining network, with relatively small overall electrical usage in Kuwait,” said Alex de Vries-Gao, a tracker for how to use the encryption capability.
As Kuwaiti heats up in the summer in the coming months, officials continue to ask citizens to reduce their power consumption, and miners are expected to avoid frequent power outages during the hot summer months.
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