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Southeast Asia can turn excess energy into economic value through Bitcoin mining: expert
KEY POINTS
- Bitcoin mining rigs have emerged in some Southeast Asian countries in recent months
- BTC Mining Hub Suitable in Southeast Asia Due to Improving Renewable Energy Transition Goals: Marathon Digital EMEA MD
- Marathon Digital sees Southeast Asia as a “key market”: Maroj Narender Madnani
- High crypto adoption in the region could help boost the Bitcoin mining industry in Southeast Asia
The global Bitcoin and crypto mining industry has been flourishing in recent years, and at the center of a less noticed revolution is Southeast Asia, where growing interest in the industry coincides with improving commitments towards the renewable energy transition – a dual that could bring economic benefits. value for the region in the long term.
While Southeast Asia still has a long way to go before reaching its renewable energy goals, there is already a significant growing focus on renewables, said Manoj Narender Madnani, Managing Director of EMEA at cryptocurrency mining giant Marathon Digital, to the International Business Times. He said the increased focus on transitioning to the use of renewable energy could lead to greater power generation, making the region a suitable location for Bitcoin mining.
In the 2024 Green Economy Report from Bain & Company, GenZero, Standard Chartered and Temasek Southeast Asia titled “Moving the needle” which was released in April, Temasek’s Head of ESG Investment Management and General Director of Sustainability Kyung-Ah Park said that Southeast Asia’s “biodiversity and abundance of natural resources, as well as strategic importance as an industrial hub , enable you to harness nature-based solutions and new technologies for a once-in-a-generation opportunity to ride the wave of green growth.”
Riding the wave are most member states of the Association of Southeast Asian Nations (ASEAN), with many members demonstrating “a strong commitment to achieve net zero by 2050“, according to the World Economic Forum. The 10-member bloc expects the Philippines to commit to the same goal, and Indonesia has set its target for 2060.
What does Bitcoin mining have to do with Southeast Asia’s renewable energy transition goals? An October 2023 to study by a group of scientists at Cornell University found that establishing BTC mining farms “strategically” can maximize productivity and, in turn, potentially create “a self-sustaining cycle for the expansion of renewable energy” within the high-energy usage industry.
As Southeast Asian governments push to reduce the region’s carbon footprint, mining rigs have recently been popping up across the region. Attracted by cheaper energy and qualified labor, mining rigs have already emerged in Malaysia, Indonesia and Laos. Its emergence follows data that found Bitcoin mining operations that utilized sustainable energy reached a new all-time high in January at 54.5%, and also saw a 3.6% increase during calendar year 2023. The data showed that BTC mining utilized the most sustainable energy across several subsectors.
“The current distribution of energy does not match the generation, therefore, Bitcoin mining offers a solution that will be able to absorb the excess energy that is being produced,” said Madnani.
Furthermore, excess gas can be “captured and computed into economic value”. At a time when Southeast Asia’s economy has weathered several headwinds, the economic value that Bitcoin mining can bring could be what the region needs for further growth.
For Marathon Digital, Southeast Asia “is a key market,” Madnani said. “We are currently evaluating some opportunities in this key market,” he said.
He acknowledged there are challenges ahead for Southeast Asian miners hoping to get a slice of the multibillion-dollar industry. One way to overcome challenges related to establishing Bitcoin mining infrastructure is to be part of a global alliance that can allow them to benefit from economies of scale, he said.
Amid the challenges, there are also emerging trends in the region that could help boost Southeast Asia’s Bitcoin mining industry over the next five years. “The demographics work well and, most importantly, this is an area of the world where crypto adoption is relatively high,” he highlighted.
At blockchain analytics firm Chainalysis’ 2023 Global Cryptocurrency Adoption Index, a total of four Southeast Asian nations made it into the top 10, with Vietnam taking third place and the Philippines taking sixth place in the rankings. Recently, the Philippine Securities and Exchange Commission (SEC) approved a pilot led by local crypto giant Coins.ph for what could be the first stable coinmarking another step towards wider adoption of cryptography.
The region has a lot of work to do to drive digital asset adoption and renewable energy goals, but with an “abundance of unexplored bioenergy“In the region, Bitcoin mining can only thrive in Southeast Asia.