Canadian state suspends crypto mining activities for 18 months

Crypto Regulation
Canadian state suspends crypto mining activities for 18 months

As per local media sources, the Canadian state of Manitoba has placed an embargo on new cryptocurrency mining operations for the next 18 months because of concerns that such enterprises will overload the local grid.

Manitoba fear miner’s load will adversely affect local residents

The fear that the miners‘ load would adversely affect residents has prompted several states to halt or delay the approval of new cryptocurrency mining companies. Manitoba attracts customers that require a great deal of electricity, such as those engaged in the electricity extraction of bitcoins, because it has the second-lowest power prices in Canada, behind only Quebec.

The Regional Finance Minister also raised the PCG’s worry that blockchain enterprises might not be very good at adding to the labor force. He explained that it is possible to operate with a small workforce while consuming hundreds of megawatts of electricity.

According to Friesen, “Manitoba Hydro cannot make unilateral decisions regarding who to hook up.” The government is reportedly assessing the extent to which cryptocurrencies have had an economic impact and whether or not a regulatory framework is necessary to allow additional grid connections.

Hydro-Québec, a provincial utility, requested a moratorium on blockchain-related energy allocations from the province’s electrical distribution authority earlier this month. A partial moratorium against PoW mining was recently implemented in the American state of New York, leading to a similar response from Manitoba.

Reports from CTV News and CBC state that Manitoba Hydro minister and MinisterMinister Of finance Cameron Friesen said on Monday. “We can not just say, ‘Well, anybody can take whatever [electricity] they like to take, and then we’ll build dams. 

For the next 18 months, the government will prohibit any new crypto-mining facilities from accessing the grid. The 37 operational mines, however, will remain unaffected.

Manitoba has the second-cheapest energy rates in Canada, behind only Quebec; this has attracted many miners to the province. The Minister has stated that an estimated 17 miners have solicited grid connection, with a combined energy requirement of 371 MW. The Keeyask power plant has been running at total capacity since earlier this year, and 371 MW represents nearly half of its ability.

To finance the construction of the Bipole and Keeyask III transmission line, Manitoba Hydro has taken on a total of CAD 3.7 billion ($2.75 billion) in loans during the past 15 years, double the company’s debt from the previous period. According to Manitoba Hydro, over 40% of customer utility payments are applied toward debt service.

Manitoba hydro paying off debt

Manitoba Hydro is also paying off debt from the latest development projects. The utility’s debt tripled in 15 years as a result of two megaprojects that went $3.7 billion over budget: the Keeyask generating plant and the Bipole III transmission line.

The Vice Chairman of the Canadian Blockchain Alliance, a trade association, has stated that working on the servers is a highly lucrative career option. From Calgary, Jade Alberts said, “Somebody is going to have to repair them, check on them, and make sure they’re running.”

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Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.