Venezuela’s crypto mining ban could be solving a power crisis

The government of Venezuela issued an emergency bulletin stating that electricity demand is now at 15,579 megawatts (the highest level in 9 years).

According to the official government communiqué, policymakers activated a supervision plan to uncover illegal crypto mining and punish offenders severely.

Venezuela’s electricity grid was already in trouble long before Bitcoin existed

OPEC’s latest annual statistical review states that Venezuela holds roughly one-fifth of the world’s crude oil reserves (about 303 billion barrels). The country also has the Guri Dam, a massive hydroelectric dam and the second-largest hydroelectric power plant in the world, which once supplied 80% of the nation’s power.

According to research by the Borgen Project, the government charged extremely low electricity prices, so Venezuelans would pay only about 20% of the actual cost of generating power.

As a result, the state-owned power company Corpoelec struggled to properly maintain the grid with the limited resources or even invest in new infrastructure, so eventually the transmission lines crumbled. 

On top of that, the mass immigration that sent over 7 million Venezuelans abroad since 2015 included the skilled engineers who once ran everything inside the plant. This meant the skill gap grew massively.

As expected, the Guri Dam failed, and on March 7, 2019, the entire country was left in total darkness. The Center for Strategic and International Studies published a report on the incident and its effects, saying most cities lost power for more than 90 hours, which threatened the lives of many, especially critically ill patients in hospitals. 

The Maduro regime, at the time, blamed the power failure on opposition leaders and the US, accusing them of “using cybernetic and electromagnetic attacks.” But investigative reporting said otherwise, blaming years of neglect, corruption, and mismanagement.

Miners went to Venezuela precisely because the electricity was so cheap

Because Venezuela had subsidized its grid and offered near-zero electricity rates, the country became a safe haven for Bitcoin mining. BTC computers run 24/7 and use massive amounts of electricity, so cheap power only meant bigger profits for miners. 

Ordinary citizens also turned to mining because it allowed them to earn dollars in a country where the local currency had become almost worthless due to hyperinflation. In fact, a working mining rig in Venezuela could make more a month than most workers earned in a year of hard labor. 

So the crackdowns have been running for years, and aren’t a new declaration. For example, regulators ran an anti-corruption drive and seized about 2,000 mining machines in Maracay, forcing the Ministry of Electric Power to disconnect all crypto mining farms from the national grid in May 2024. 

“The goal is to disconnect all cryptocurrency mining farms in the country from the National Electric System (SEN), avoiding a significant impact on demand, which allows us to continue offering an efficient and reliable service to all Venezuelans,” the Ministry of Popular Power for Education (MPPPE) said on its Instagram account. 

The state governor of Carabobo, Rafael Lacava, even told citizens to report anyone mining crypto, saying, “If you see a house that you know is mining crypto, tell that person to turn off the farm, or just report it. Because they are directly deducting power from the grid to earn some money. And we will be left without electrical service if they don’t stop.”

The government says the ban is necessary, but the numbers tell a more complicated story

According to the official Venezuelan government statement electricity demand reached 15,579 megawatts, attributed to the heat wave and to “the economic growth that maintains its momentum.”

The government also said it was working on an oversight plan and deploying technical teams to stabilize the grid, and passively emphasized the prohibition on digital mining. 

“The absolute ban on digital mining in the national territory is upheld. Those who illegally use this activity will be sanctioned as the law establishes.” — Venezuelan Government Communiqué, May 7, 2026

Not surprisingly, the government spent a big part of the statement blaming international sanctions for the grid failures and announcing a long-term plan that it plans to make known to private, industrial, academic, and scientific sectors. The crypto mining ban came near the end, almost as an afterthought, suggesting it wasn’t the main story.

Sanctions, unpaid bills, and missing engineers are the real problems

According to Eva Daily’s reporting on the situation with the Venezuela power grid, international equipment suppliers are demanding that the government provide advanced payment guarantees for grid repairs, but that might not be possible. Mismanagement of funds, sanctions, the collapse of oil revenue, and the cost of establishing an authoritarian political structure have shattered the country’s finances, severely limiting the government’s capacity.

Now, because the government cannot make any payments, the grid continues to deteriorate as suppliers refuse to extend credit for parts. According to Wikipedia’s comprehensive account of Venezuela’s 2024 blackouts, the Maduro administration remained silent about the state of affairs over the electrical system for nearly 14 years. 

The engineering talent that kept the Guri Dam and broader grid system in check left the country as part of the great exodus, and since you really can’t operate a complex hydroelectric and transmission system without them, banning crypto miners won’t help much. 

There’s a middle ground between leaving money in the bank and rolling the dice in crypto. Start with this free video on decentralized finance.