Wild mining. Malaysia is a Southeast Asian country that has made headlines in recent years for its relatively open approach to cryptocurrencies. The local government has indeed adopted a rather favorable position towards these new financial technologies, recognizing their potential to boost the country's digital economy. However, this policy is not without its problems, particularly concerning Bitcoin mining.
According to a recent report from the Access Blockchain Association of Malaysia, electricity theft by illegal miners is estimated to have cost more than 100 million dollars to the national electricity company, Tenaga Nasional Berhad (TNB). Heading to Malaysia to assess this long-standing issue.
Key points of this article:
Malaysia has lost over 100 million dollars due to electricity theft by illegal Bitcoin miners.
The report from the Access Blockchain Association of Malaysia advocates measures to regulate this lucrative activity.
Illegal Bitcoin mining is costing Malaysia dearly
According to the report from the Access Blockchain Association of Malaysia, Malaysia ranks between 7th and 8th worldwide in terms of hashrate, contributing about 2.5% to 3% of Bitcoin mining. However, a large part of this activity is carried out by illegal operators who steal electricity to power their machines. Between 2020 and September 2024, the electricity company TNB lost 441.6 million Malaysian ringgits (approximately 104.2 million dollars) due to these thefts, mainly attributed to illegal mining.
The report highlights that Malaysia could generate considerable additional revenue through cryptocurrency mining if it managed to regulate this activity. Currently, illegal miners represent a net loss for the economy, but they could become an important source of revenue if appropriate measures were put in place to encourage them to comply with the law.
The Access Blockchain Association of Malaysia thus proposes several recommendations to address this issue. Among them, the creation of a specific license for mining, the introduction of green tariff initiatives to encourage the use of renewable energy, and the end of legal loopholes that allow electricity theft. The report also suggests developing Sharia-compliant mining models, an approach that could appeal to some investors concerned about adhering to their religion in this majority-Muslim country.
Malaysia, a country with high potential for BTC mining
Malaysia also has several advantages that could make it a leader in cryptocurrency mining. The country first benefits from robust Internet connectivity and an abundance of hydroelectricity, two essential elements for Bitcoin mining. Additionally, Malaysia is strategically well-located in Southeast Asia, a region experiencing technological growth.
However, despite these obvious advantages, the country still faces several obstacles. The current regulatory framework is vague and inconsistent, which deters potential investors. Moreover, electricity theft by illegal miners continues to pose a major problem for the national electricity company and for the economy in general.
Malaysia thus has every interest in regulating Bitcoin mining to transform this clandestine activity into a legitimate source of income. This would not only reduce losses related to electricity theft but also generate tax revenue for the government. The report from the Access Blockchain Association of Malaysia concludes by stating that Malaysia could become a major player in cryptocurrency mining if it manages to overcome these challenges.
Malaysia, like many other countries, finds itself at a crossroads regarding cryptocurrency mining. On one hand, the country must face the challenges posed by illegal mining and electricity theft. On the other hand, it has the opportunity to leverage its natural resources and geographical position to become a leader in the sector. The ball is now in the court of the Malaysian government, which will need to make strategic decisions to navigate this complex landscape.
